Tesla's $1.2B Subsidy Shock: Musk vs. Trump, Round Two

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Call it the clash of the titans. In one corner: Elon Musk, CEO of Tesla, former head of Washington’s short-lived DOGE bureaucracy, and techno-optimist-in-chief. In the other: Donald Trump, back in the White House and launching fiscal torpedoes at his former ally’s corporate empire.

This week, that feud took another sharp turn. Trump threatened to cut off all federal subsidies to Musk-linked ventures, including Tesla and SpaceX. The result? Tesla shares cratered nearly 6%, wiping tens of billions in market cap and highlighting just how fragile the so-called "Musk premium" really is.

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Trump Unleashes the DOGE

On Truth Social, Trump railed against Musk as "the most subsidized man in history," vowing to have the Department of Government Efficiency (DOGE) investigate Musk’s government contracts and tax credits. This comes as the Senate passed the megabill to end the EV credit program—a provision that alone could strip Tesla of $1.2 billion in annual profit.

Trump's rant: "No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE."

Musk’s response? A Pinocchio meme and another thinly veiled call for a new political party.

The Market Reacts, Analysts Follow

JPMorgan’s Ryan Brinkman reiterated his $115 price target, citing ongoing EV demand erosion in Europe, fierce competition in China, and the evaporating U.S. tax incentives. Tesla deliveries are expected to fall 19% year over year in Q2.

Meanwhile, fresh data from Europe shows Tesla sales fell over 60% in Sweden and Denmark in June. U.S. registrations dropped 16% in April. Add to that a political circus, and you’ve got a recipe for volatility.

Here's One Way to Trade the Turbulence

Tesla isn’t just a car company, it’s a sentiment trade. And sentiment can turn on a dime.

If you're looking to algorithmically ride this roller coaster, Surmount's TSLA Short & Long EMA Strategy is a rules-based, emotion-free way to navigate the chaos. It uses a 10-day EMA crossing above a 50-day EMA as a buy signal. When that trend reverses, it exits the position. No political noise. No guesswork. Just price and pattern.

Final Thoughts

When fiscal policy becomes a weapon and the White House takes aim at single companies, rational investing dies a little. But that doesn’t mean you have to sit in the blast radius. Whether you’re playing the long game or the tactical trend, the message is the same: adapt or get steamrolled.

Stay hedged,

Analyzed Investing