TSLL, TSLQ See Big Swings as Musk/Trump Rift Escalates

Shares of Tesla Inc. (TSLA) plunged Thursday as tensions between CEO Elon Musk and President Donald Trump spilled into public view, shaking investor confidence in one of the market’s most volatile stocks.

Tesla was down nearly 9% midday after President Trump expressed frustration with CEO Elon Musk over his criticism of the administration’s flagship tax bill. Speaking to reporters at the White House, Trump said he was “very disappointed” in the Tesla chief.

The bill in question—which passed the House and is now being debated in the Senate—includes both tax cuts and spending reductions but is still expected to significantly increase the federal deficit.

Musk has been vocal in his opposition, calling the legislation fiscally irresponsible. He also flagged the proposed elimination of electric vehicle and solar tax credits, which could dent demand for Tesla’s cars and energy products.

“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 posted on X. 

Trump, for his part, claimed Musk’s outrage stems from the loss of the tax credits, as well as Trump’s decision to block Musk’s preferred candidate to lead NASA.

War of Words Hits TSLL, Boosts TSLQ

The sharp war of words is a remarkable turn for a relationship that once resembled a political "bromance." Musk spent an estimated $200 million to $300 million helping to elect Trump and republicans during the 2024 campaign—a fact he reminded followers of in a pointed post Thursday.

“Without me, Trump would have lost the election,” Musk declared.

That kind of rhetoric may not sit well with Trump—or with Tesla investors already nervous about the company’s trajectory. Some may be selling on fears that Musk’s fraying relationship with the White House could complicate Tesla’s regulatory path, particularly in areas like autonomous vehicles.

That’s a concern for investors who’ve increasingly pinned their hopes on robo-taxis and humanoid robots to justify Tesla’s lofty valuation. The company’s core EV business has struggled over the past year, and its brand has taken a beating among Democrats due to Musk’s growing involvement in partisan politics. 

Now, there’s a risk of alienating Republicans, too.

The Direxion Daily TSLA Bull 2X Shares (TSLL) cratered 18% midday Thursday, while the Tradr 2X Short TSLA Daily ETF (TSLQ) rallied by a similar amount.