As a result, Tesla shares plummeted 14% on Jun 5 to US$284.70 ($366.41) at market close.
The dispute highlights the rapid and significant deterioration in the relationship between Trump and the world’s wealthiest individual, driven by disagreements over the bill. Until recently, Musk had been a strong ally of the president and a frequent presence at the White House.
“Elon and I had a great relationship. I don’t know if we will anymore,” Trump tells reporters in the Oval Office on Jun 5.
Included in Trump’s ‘big, beautiful bill’ that Musk strongly opposes, is the expiration of the US$7,500 electric vehicle (EV) subsidy at the end of 2025, seven years before it is set to expire.
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While the subsidy expiration will weigh down on overall EV sales, Morningstar’s Strategist, Seth Goldstein still believes that cost and convenience factors will be the larger drivers of EV adoption.
“Longer term, we do not view subsidies as a growth driver of EVs. Once long-range EVs reach cost parity with internal combustion engines and there is adequate fast charging built along highways and throughout cities, consumer demand, not subsidies, will drive EV adoption,” Goldstein writes.
Overall, the subsidy expiration will weigh down on Tesla’s 2026 deliveries, however, over the long term, Goldstein believes that Tesla's autonomous driving software will ultimately prove to be a differentiator that could lead consumers to choose a Tesla.
For now, Goldstein retains a US$250 fair value estimate for the stock and mentions in his Jun 5 report that with the Thursday plummet of the share price, he views Tesla as fairly valued now as the company is now trading less than 15% above their fair value estimate.
