June 5, 2025 – Tesla (TSLA) shares tumbled Wednesday following a public policy clash between CEO Elon Musk and former President Donald Trump, compounding investor concerns over weakening European demand and mixed global sales figures in May.
The sell-off comes as Musk’s escalating criticism of Trump and Republican-backed fiscal policies raises questions about Tesla’s regulatory standing, particularly in key areas like autonomous driving approvals. Meanwhile, Tesla’s highly anticipated robotaxi unveiling on June 12 looms as a potential turning point for the stock.
1. Musk-Trump Feud Sparks Investor Jitters
The tension between Musk and Trump reached a boiling point this week after Musk lambasted a Republican-backed spending bill, calling it a “disgusting abomination” in a late-night social media post.
- Musk’s Criticism:
- “If the massive deficit spending continues, there will only be money for interest payments and nothing else!”
- “Shame on those in the House who voted for this pork-filled bill.”
- Political Fallout:
- Musk’s Department of Government Efficiency (DOGE), created to identify wasteful spending, has faced criticism for failing to deliver promised budget cuts.
- His alliance with Trump had previously been seen as beneficial for Tesla, particularly in securing favorable regulations for SpaceX, NASA contracts, and autonomous vehicle testing.
- Now, Musk’s right-leaning political stance is alienating some Tesla customers, with reports of protests at U.S. showrooms and weakening demand in progressive markets.
Market Reaction:
- TSLA fell ~5% in early trading Wednesday.
- Investors fear Musk’s political battles could delay NHTSA approvals for Tesla’s robotaxi program, a key growth driver.
2. Robotaxi Race: Tesla vs. Waymo
Tesla’s June 12 robotaxi event in Austin is a make-or-break moment for the company, with much of its valuation tied to full self-driving (FSD) technology.
- Tesla’s Challenges:
- Still in testing phase, while Waymo (Alphabet) already operates 250,000 robotaxi trips per week.
- Regulatory hurdles persist, especially if Musk’s political conflicts slow approvals.
- Waymo’s Lead:
- Fully driverless taxis already deployed in San Francisco, Phoenix, and Los Angeles.
- No reliance on human supervision, unlike Tesla’s FSD.
Investor Takeaway: If Tesla fails to demonstrate true autonomy on June 12, the stock could face further pressure.
3. Mixed May Sales: Australia Shines, Europe Struggles
Bright Spot: Australia
- 3,897 deliveries in May (highest in nearly a year).
- Model Y sales surged 122.5% (3,580 units).
- Year-to-date sales still down 48.2%, but refreshed Model Y suggests recovery.
Weakness in Europe & UK
- UK registrations fell 45% (1,758 units) as BYD sales more than doubled.
- France, Germany, Sweden, Spain, Denmark all saw declines.
- Only Norway and Austria posted gains.
Why the Drop?
- Musk’s politics may be hurting brand perception in progressive markets.
- Competition from BYD, Hyundai, and legacy automakers intensifying.
- Model 3 refresh delays impacting demand.
4. What’s Next for Tesla Stock?
Bull Case:
- Strong Model Y demand in Australia signals recovery potential.
- Robotaxi success on June 12 could reignite investor enthusiasm.
- Potential Trump re-election may ease regulatory pressures.
Bear Case:
- Political backlash hurting sales in key markets.
- Robotaxi delays or underwhelming demo could trigger further sell-offs.
- Waymo’s lead in autonomy threatens Tesla’s long-term edge.
Price Action:
- Support level: $170 (critical hold for bulls).
- Resistance: $200 (needs a strong catalyst to break through).
Final Verdict: High-Stakes Week Ahead
Tesla’s stock slump reflects three key risks:
- Political friction between Musk and Trump.
- Weak European demand amid brand controversies.
- Make-or-break robotaxi reveal on June 12.
If Musk can navigate regulatory hurdles and prove Tesla’s FSD is truly autonomous, the stock could rebound sharply. But if competition, politics, or execution issues persist, further downside is likely.
Investors should brace for volatility—the next 10 days could redefine Tesla’s trajectory.
