Supports from high-profile individuals might sometimes pose challenges rather than benefits, and Elon Musk’s Tesla could be experiencing just that due to Donald Trump’s recent endorsement. On Tuesday, Tesla’s investors were buoyed by President Trump’s clear show of allegiance to Musk and his car company. During a press conference at the White House, with five Tesla vehicles strategically lined up, Trump lauded Musk as a “patriot” and even revealed his purchase of a Tesla car. His remarks and actions appeared to have a positive effect, as Tesla’s stock saw an uptick following a drastic fall the previous day.
However, experts caution that this unique presidential recognition of a private enterprise could have adverse consequences. Analysts point to Tesla becoming a political emblem of Trump and the Department of Government Efficiency (DOGE), which Elon Musk leads. According to Dan Ives from Wedbush Securities, such association could tarnish the brand, potentially alienating a segment of its customer base.
The upward trajectory of Tesla’s stock started earlier on Tuesday following Trump’s post on his Truth Social platform, where he commended Musk for his dedication to the nation. Trump’s post condemned “Radical Left Lunatics” for allegedly attempting an illegal boycott of Tesla. This visible support at the White House further stimulated a surge in Tesla’s stock as Trump announced his purchase of a Tesla vehicle, opting for a striking red Model S.
Tuesday’s market closed with Tesla’s stock rising by about 4%, recovering from one of the worst days in its trading history. Yet, the brand has been under significant pressure, facing intense rivalry from emerging electric vehicle competitors, especially those based in China. This has coincided with increased scrutiny over Musk’s political associations, which has led to backlash against Tesla in the form of protests at showrooms and vandalism of its vehicles in the U.S.
The company has witnessed a 45% drop in its share value in 2025, reaching a new low on Monday. This poses a dual threat to Tesla: employee compensation and future expansion. Many Tesla employees have the option to buy shares at a reduced rate, but with the stock’s sharp decline, the previously offered discounts are now null. Moreover, a reduced share price compromises Tesla’s capacity to generate funds through newly created shares, a strategy they previously employed to great effect. In the past, such funding fueled the construction of new factories and research into self-driving technologies.
As CEO, Musk’s association with the administration’s agenda for significant governmental workforce reductions under the DOGE initiative leaves stakeholders apprehensive about his commitment to Tesla. His role expands across multiple ventures, notably SpaceX and X, with the latter recently suffering downtime that Musk attributed to major cyberattacks. Musk’s decision to cut X’s workforce raised concerns about increased vulnerabilities in the technology. Meanwhile, SpaceX faced its setbacks when one of its rockets disintegrated over Florida, shortly after another failed launch.