Shares of Tesla Inc. TSLA declined 4.78% during Tuesday pre-market session after CEO Elon Musk reignited political comeback rumors following his criticism of President Donald Trump’s spending bill.
What Happened: Late Monday, Musk expressed his disapproval of the spending bill on social media platform X, stating, “If this insane spending bill passes, the America Party will be formed the next day.” He further criticized the existing political system, calling for alternative parties to give Americans a voice.
Musk’s criticism of the bill, which he claims would increase the U.S. debt ceiling by $5 trillion, extends to both Republicans and Democrats. He also warned politicians supporting the bill that they would lose their primaries next year.
President Trump responded to Musk’s criticism by suggesting that the Tesla CEO’s empire relies heavily on federal subsidies. He stated on Truth Social, “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa.”
Additionally, Tesla saw over 60% plunge in vehicle registrations in Denmark and Sweden during June, after witnessing strong sales in Norway.
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Why It Matters: The spending bill and the proposed cuts have been criticized by experts and could impact Tesla and the broader automotive industry’s EV push, as it proposes axing the $7,500 federal EV credit on all new EVs sold in the U.S.
Meanwhile, investor Gary Black warned that Tesla’s Q2 deliveries could fall short of estimates, potentially due to the political controversy surrounding the spending bill.
Furthermore, Tesla’s sales in Canada have reportedly dropped to nearly zero, as highlighted by researcher Troy Teslike. According to Teslike, Tesla may start reporting GAAP losses from Q1 2026, possibly due to the political controversy and the proposed cuts in the spending bill.
READ MORE: Elon Musk Stopped Believing In Mars Dream As A ‘Political Project’ In 2024, Says Peter Thiel Amid ‘Woke AI’ And ‘Socialist Government’ Fears
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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