Topline
Shares of Tesla plunged Thursday morning, accounting for a more than $17 billion cut to Elon Musk’s net worth, after Musk warned his automaker would likely have a “few rough quarters” ahead as federal electric vehicle tax credits expire soon.
Musk said his automaker “probably could have a few rough quarters” ahead as federal electric vehicle ... More
Tesla shares fell more than 9% on Thursday to just below $302, following an earlier slide in premarket trading.
The stock’s decline follows Tesla’s second-quarter report Wednesday, in which the automaker posted the largest drop in quarterly revenue in over a decade and a loss of nearly $600 million in revenue from automotive regulatory credits.
Movement for Tesla’s shares reduced the value of Musk’s roughly 12% stake in the automaker from about $136.3 billion to $123.7 billion, accounting for a $12.6 billion slide, while the value of his remaining 9% bonus equity—valued by Forbes at a 50% rate—dropped by $5 billion.
When asked about the possible impact of President Donald Trump’s policy bill eliminating a $7,500 tax credit for the purchase or lease of a new EV, which is set to take effect after Sept. 30, Musk said during Tesla’s earnings call the company “probably could have a few rough quarters” ahead.
Musk noted that “certainly by the end of next year, I think I would be surprised if Tesla’s economics are not very compelling.”
$397.3 billion. That’s the estimated value of Musk’s fortune as of Tesla’s share price Thursday afternoon, amounting to a more than 4% reduction to his net worth.
Alex Potter, an analyst for Piper Sandler, wrote Monday that Tesla should face questions about the impact of losing EV tax credits, noting the automaker added about $3.5 billion in “free money” in 2024 because of the credits. Potter said his firm remained optimistic, however, with estimates of a “modest reduction” to credit revenue for 2025 and 2026, as “there’s no need for drastic estimate revisions.” Wedbush Securities’ Dan Ives wrote Tuesday a loss of EV tax credits would be a “headwind” for Tesla and its competitors, adding, “This cash cow will become less of the story.”
Tesla’s shares have fallen more than 12% on the year, though the stock has rebounded in recent months after Musk departed the Trump administration as a special government employee. Some economists have criticized Musk’s continued involvement in politics, however, as William Blair analysts downgraded Tesla stock as they said investors were likely “growing tired of the distraction.” The latest hit to Tesla’s business comes after Trump signed his so-called “One Big Beautiful Bill,” which eliminated a tax credit for consumers who buy or lease EVs. Musk opposed the cuts to EV and other clean energy credits, saying they would be “incredibly destructive” to the U.S., after saying in December 2024 he believed “we should get rid of all the credits.”
Musk said during Tesla’s investor call the automaker will likely have full autonomous ride-hailing accessible to half the U.S. by the end of 2025, adding, “That’s at least our goal, subject to regulatory approvals.”