Donald Trump’s support for Elon Musk’s car company could end up hurting it.
Tesla investors cheered Tuesday as Trump came to the defense of Musk’s beleaguered and boycotted carmaker by lavishing the Tesla CEO with praise in a press conference as five Teslas lined up in the White House driveway. Trump called Musk a “patriot” and announced that he had even bought one of his cars — a show of support that may have helped Tesla stock close higher for the day after a plunge a day earlier.
But experts warn the unusual presidential backing of a private company could backfire.
“Tesla is becoming a political symbol of Trump and DOGE, and that is a bad thing for the brand,” said Wedbush Securities financial analyst Dan Ives, referring to the advisory group in charge of cutting government spending led by Musk. “You think it’s helping, but it’s actually hurting.”
Tesla’s stock began rising from the opening Tuesday after Trump posted overnight on his Truth Social platform that Musk was “putting it on the line” to help the country. Trump claimed in the post that “Radical Left Lunatics” were attempting to “illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ’baby.’”
A few hours later, Tesla stock surged even higher as Trump announced at the White House that he had bought a Tesla himself.
“I don’t like what’s happening to you,” said Trump, before picking a red Model S, which retails for $80,000. As he eased into the driver seat, he exclaimed, “Wow. That’s beautiful.”
The stock ended up closing up nearly 4% on Tuesday after one of the worst single day sell-offs in Tesla’s history a day earlier.
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