Tesla stock dived below key levels during stock market action Thursday on CEO Elon Musk's growing feud with President Donald Trump. That comes as the EV giant is expected to launch its limited robotaxi service next week.
Tesla stock sank 14.3% to 284.70 during Thursday's stock market action — falling below its 21-day exponential moving average, the 200-day moving average and 50-day line as Trump threatened to terminate Musk's government contracts.
On Wednesday, Tesla shares fell 3.55% to 332.05 amid weak Tesla China sales and concerns about Musk splitting with Trump over the president's spending and tax bill.
Tesla in China has restarted its owner referral rewards program, an $1,110 discount, to address declining sales. Meanwhile, vehicle sales out of several countries in Europe show plunging demand for Tesla vehicles.
While Tesla's EV business appears to be struggling, Musk has also repeatedly criticized Trump's tax bill this week. Musk — who just left the White House officially on May 30 — on Wednesday posted to X urging people to contact members of Congress and to "kill the bill."
However, the feud between Musk and Trump went into overdrive on Thursday.
Musk And Trump Trade Barbs
Speaking from the White House, Trump told reporters Thursday that Musk is angry the administration decided to eliminate Biden-era EV credits as well as the decision to move away from a Musk-backed head for NASA.
"Look, Elon and I had a great relationship. I don't know if we will anymore," Trump said.
"Elon is upset because we took the EV mandate, and you know, which was a lot of money for electric vehicles," Trump said Thursday. "And you know, they're having a hard time, the electric vehicles, and they want us to pay billions of dollars in subsidy."
"Elon knew this from the beginning," Trump added, referring to the administration's goal to cut the Inflation Reduction Act tax credits.
Trump went on to say that Musk "knew every aspect of this bill" but "developed the problem when he found out that we're going to have to cut the EV mandate because that's billions and billions of dollars."
"It really is unfair. We want to have cars of all types," Trump said.
Musk responded on X claiming that this was "false."
"This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it," Musk wrote Thursday.
Trump's Big Threat: Musk Strikes Back
"Whatever. Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill," Musk added.
The Tesla chief also claimed that without him and his funding "Trump would have lost the election."
"Such ingratitude," Musk wrote on X on Thursday.
Trump then struck back with posts on his social media platform, Truth Social.
"Elon was 'wearing thin,' I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY," Trump wrote Thursday.
"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was surprised that Biden didn't do it!" Trump added.
A big part of the postelection bull thesis is that Musk's close alliance with Trump would benefit Tesla and SpaceX via government contracts and favorable regulation.
Musk would not be outdone in the online war of words Thursday.
"Time to drop the really big bomb," Musk wrote on X, before adding that Trump "is in the Epstein files. That is the real reason they have not been made public."
"Have a nice day. DJT!" Musk said.
Tesla Headwinds Ahead Of Robotaxi Launch
Bloomberg also reported Wednesday about a fatal Tesla crash, illustrating the concerns around fully autonomous driving. Readers were quick to point out that the Tesla vehicle in question was using an older version of the Full Self-Driving software.
Meanwhile, Tesla has asked a judge to reject a demand to reveal some of its vehicle crash data held by the National Highway Transportation Safety Administration Tesla argues that public disclosure could cause competitive harm, according to Reuters.
Tesla investors await the limited robotaxi service launch in Austin, Texas, reportedly slated for June 12. Musk has repeatedly stated long-term Tesla value is not tied to the EV business.
Tesla Stock Performance
Tesla stock plunged through several moving averages, according to analysis of MarketSurge charts. Shares have now erased a strong move from an aggressive entry of 294.86 cleared on May 9.
The upcoming Tesla robotaxi launch is a risk event that could trigger huge moves, and not necessarily on day one.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote late Thursday that TSLA is "under major pressure" as investors fear that this Musk/Trump battle will stop their friendship and change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump administration."
"This feud does not change our bullish view of Tesla and the autonomous view but clearly does put a fly in the ointment of the Trump regulatory framework going forward," Ives added, referring to the long-held belief that Trump would clear the regulatory path for autonomous vehicles.
Cathie Wood's ARK Invest has also repeatedly trimmed Tesla holdings in recent days. Wood sold Tesla on Monday, after making similar moves three times last week, selling a combined nearly 50,000 shares.
TSLA stock is now down about 29% for the year, despite surging on robotaxi bets following the April 22 Q1 conference call. The stock is also down 41% from its all-time high of 488.54.
Tesla stock has a 21-day average true range of 4.57%. The ATR metric, available on IBD's MarketSurge charting tool, gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily stock market action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The S&P 500 and Nasdaq are now in a power trend. Investors can buy stocks with ATRs of up to 8%, though they should be wary of being too concentrated in high-octane names.
Tesla stock has a 76 Composite Rating out of a best-possible 99. The stock also has a 93 Relative Strength Rating and a 59 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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