Tesla shares take a hit

Shares of electric vehicle maker Tesla, which is headed by Elon Musk, slumped Tuesday as the war of words between the billionaire and President Donald Trump over the big bill of tax breaks and spending cuts heats up again, with Musk saying he may form a new political party. Shares of Tesla have already tumbled more than 20% this year as worldwide sales of the company's vehicles erode amid a backlash against Musk and his association with the Trump administration, as well as stiffer competition. Tesla sales are plummeting in Europe and China as well. Tesla sales in China dropped 15% in May from a year earlier, according to the China Passenger Car Association, more than twice the decline from just the previous month. Tesla's stock fell more than 5% in morning trading. The resumption of hostilities between Trump and Musk, also the CEO of SpaceX, is always bad news for investors in Musk's companies. "This BFF situation has now turned into a soap opera that remains an overhang on Tesla's stock with investors fearing that the Trump Administration will be more hawkish and show scrutiny around Musk related US government spending related to Tesla/SpaceX and most importantly the autonomous future with the regulatory environment key to the future of Robotaxis and Cybercabs," wrote Wedbush Securities analyst Dan Ives on Tuesday. "We would expect the stock to be weak to kick off trading this morning as the Street will show concern that the Trump and Musk once BFF relationship now backfires and turns into a junior high school friendship gone bad into an enemy." The most prominent divide in the relationship between Musk and Trump is the president's big bill. Musk ramped up his criticism of the bill over the weekend, arguing the legislation that Republican senators are scrambling to pass would kill jobs and bog down burgeoning industries. Musk posted on X on Saturday that the bill would be "political suicide for the Republican Party." With the Senate working its way through a tense overnight session that dragged into Tuesday, Musk suggested he will work to get members of Congress who vote for the bill out of their seats next year. "Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame," he wrote on X. "And they will lose their primary next year if it is the last thing I do on this Earth." The post was viewed 26 million times on the social media platform. A few hours later, Musk followed up with a post claiming he will create a new political party if the bill passes. "If this insane spending bill passes, the America Party will be formed the next day," he wrote. "Our country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE." Musk's post about the America Party was viewed 32 million times on X. Trump focused some of his criticisms of Musk on EV mandates and subsidies. In a post on Truth Social early Tuesday, Trump said Musk has known that he's against an EV mandate and that people should not be forced to own electric vehicles. "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," Trump wrote. Trump also suggested that the U.S. could cut back on spending by targeting segments of the economy in which Musk plays a significant roll. "No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!" Trump posted, alluding to the cost-cutting entity that until recently, was headed by Musk. Several hours later, while standing on the White House lawn before heading to Florida, Trump continued to take shots at Musk and what he believes to be his biggest grievance, the billionaire's displeasure over potentially losing EV subsidies. "He's very upset. You know, he can lose a lot more than that, I'll tell you right now," Trump said. "Elon can lose a lot more than that." When asked by a reporter if he was going to deport Musk, Trump warned that the Department of Government Efficiency, or DOGE, could come back to hurt the billionaire. "We'll have to take a look," Trump said. "We might have to put DOGE on Elon. You know what DOGE is? DOGE is the monster that might have to go back and eat Elon. Wouldn't that be terrible? He gets a lot of subsidies." Musk responded on X by saying he would refrain from escalating the conflict, but he took another shot at Trump and Republicans anyway. "What good is Doge saving $160B when this bill increases the debt ceiling by $5T? It makes mockery of the work," he wrote.