Tesla Shares Drop After Trump Says DOGE Should Investigate Elon Musk

2025-07-02
Tesla Shares Drop After Trump Says DOGE Should Investigate Elon Musk

Tesla shares slumped sharply on Tuesday after U.S. President Donald Trump publicly suggested that Elon Musk’s companies may face a federal investigation and subsidy cuts. 

The statement, made via Trump’s Truth Social post, referenced the Department of Government Efficiency (DOGE)—an initiative once led by Musk himself. 

The renewed political tensions have rattled investors, triggering a 5.3% drop in Tesla’s stock and raising concerns about Musk’s growing rift with the administration.

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Trump Threatens Subsidy Cuts and DOGE Probe

In a late-night post, President Trump lashed out at Elon Musk, saying, “Elon may get more subsidy than any human being in history... Perhaps we should have DOGE take a good, hard, look at this.” 

The threat follows Musk’s vocal opposition to a controversial tax and spending bill moving through Congress, which he claims adds dangerously to the national deficit while stripping support from key green energy sectors, including EVs.

Trump doubled down during a press briefing the following morning. “He’s upset that he’s losing his EV mandate… but he can lose a lot more than that,” Trump said. 

The Department of Government Efficiency, or DOGE, was a Musk-led initiative aimed at trimming federal spending, though Musk stepped down from the role in May 2025.

Read Also: Elon Musk Still Influences Cryptocurrency—Here’s How and Why It Matters

Market Reaction and Investor Concerns

Tesla’s shares dropped by 5.3% on Tuesday following Trump’s comments. The stock had previously rebounded more than 11% since early June, after a prior flare-up in tensions between Musk and Trump cooled. 

However, the latest remarks reignited fears of regulatory backlash and potential subsidy removal, particularly for Musk’s electric vehicle and aerospace ventures.

Investors are especially concerned because many of Musk’s companies—including Tesla, SpaceX, and Starlink—benefit from favorable government policies, contracts, and subsidies. 

A significant reduction in these supports could have tangible effects on their financial performance and innovation capacity.

Musk Responds and Escalates Criticism

In a sharp rebuttal posted on X, Musk said, “I am literally saying CUT IT ALL. Now.” The Tesla CEO insists that his objections are rooted in fiscal responsibility, not self-interest. 

He also added fuel to the political fire by suggesting the creation of a new political movement: “Time for a new political party that actually cares about the people.”

Musk has increasingly distanced himself from both major parties, despite his earlier alignment with Trump during the 2024 campaign. 

His latest remarks suggest a possible shift toward third-party politics, which could influence both policy debates and voter sentiment heading into the 2026 midterms.

Read Also: Elon Musk vs Donald Trump: Inside the Growing Rift Between Two Power Players

Conclusion

The clash between Elon Musk and Donald Trump has once again sent ripples through financial markets. 

As Tesla’s stock dips and political rhetoric intensifies, both investors and policymakers are closely watching how this high-profile feud could shape future subsidies, regulations, and the broader EV sector. 

Whether the DOGE investigation materializes or not, the incident signals a volatile mix of politics and tech—one with billions of dollars and substantial influence on the line.

FAQ

Why did Tesla stock drop?

Tesla stock fell 5.3% after Trump threatened to investigate Musk’s companies and suggested cutting government subsidies.

What is DOGE in this context?

DOGE refers to the Department of Government Efficiency, a federal initiative Musk previously led, not the cryptocurrency.

Is Musk still working with the government?

No. Musk resigned from his DOGE leadership role in May 2025 following disagreements over federal spending policies.

What triggered Trump’s comments?

Musk’s criticism of a tax and spending bill—particularly its impact on the EV industry and rising national debt—sparked Trump’s reaction.

5. Could Musk’s companies lose subsidies?

Yes. If Trump follows through, SpaceX, Tesla, and others could face subsidy cuts, potentially affecting their operations and valuations.

Disclaimer: The content of this article does not constitute financial or investment advice.

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