Tesla Faces Losing Billions After Trump-Musk Fallout

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⚡ TESLA FACES LOSING BILLIONS AFTER TRUMP-MUSK FALLOUT

By Egin Ibi Auto News Desk | July 22, 2025

In a dramatic turn of events that could shake up the electric vehicle (EV) industry, Tesla Inc. is facing the risk of losing billions of dollars in market value after a sudden and unexpected fallout between former U.S. President Donald Trump and Tesla CEO Elon Musk.

The once-amicable relationship between the two billionaires took a sharp nosedive after what insiders described as a “heated disagreement” over policy promises, factory incentives, and political endorsements. According to reports, Musk, who had maintained a pragmatic approach in engaging both Democratic and Republican leaders for Tesla's business interests, is now finding himself at odds with Trump's increasingly nationalistic and oil-favored agenda.

🚨 The Fallout: What Went Wrong?

Sources close to both camps allege that the fallout was triggered by a closed-door conversation, where Trump criticized Musk's outspoken push for AI regulation, climate-forward EV policies, and tax credits for clean energy vehicles—initiatives Trump views as “job-killers” for traditional U.S. manufacturing. Musk, known for his candidness, reportedly fired back, calling Trump's views “regressive and bad for American innovation.”

The clash has now spilled into the public space, with Trump allegedly instructing key Republican governors and lawmakers to reconsider support for Tesla’s upcoming giga-factory projects, particularly in swing states like Texas and Nevada.

💸 Billions at Stake

Market analysts are warning that Tesla could lose between $20–$30 billion in projected government contracts, subsidies, and tax credits over the next 18 months if political doors begin to close on the automaker.

Tesla shares fell by over 7% in early trading on Monday, wiping out nearly $45 billion in market capitalization, as investors reacted to the deteriorating political support for one of the world’s most valuable car companies.

"If Trump gets more influence over state-level decisions—especially in red states where Tesla operates key plants—this could choke Tesla’s expansion and slow down the EV transition in America," said Morgan Fitch, an auto industry analyst at EV Market Watch.

🌐 Global Repercussions?

Tesla’s troubles are not just domestic. Analysts fear that this political rift could be weaponized by global competitors—especially EV giants in China and Europe—to gain ground in emerging markets such as India, Brazil, and Nigeria. Already, Chinese EV brands like BYD and Geely are surging forward with aggressive market entries and state support.

"Tesla has always had a geopolitical tightrope to walk," Fitch added. "But this fallout with Trump could make it wobble just when global demand for affordable EVs is skyrocketing."

🚗 What Next for Elon Musk?

Elon Musk has remained uncharacteristically silent on social media about the controversy, fueling speculation that high-level negotiations may still be ongoing behind the scenes. However, Tesla insiders have confirmed that contingency plans—including accelerating foreign plant development and lobbying in Democratic-leaning states—are being considered.

Whether Musk can mend this political rift—or turn it into an opportunity to reposition Tesla as a politically independent global brand—remains to be seen.

Stay tuned to Egin Ibi Auto News for the latest developments in the global EV race.

👉 Follow us at eginibi.blogspot.com for daily auto updates, expert analysis, and breaking news from the world of cars, mobility, and innovation.

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