Musk's feud with Trump reveals one ugly truth about Tesla stock
You can catch Opening Bid on Apple Podcasts, Spotify, YouTube, or wherever you get your podcasts. The very public spat that has erupted between Tesla (TSLA) CEO Elon Musk and president Donald Trump has sent shares of the EV maker on a wild, wild ride. Shares are off by 15% over the last five sessions as investors fear Trump will take aim at Musk’s various lines of business. Musk also being out of Trump’s inner circle also runs counter to the bull thesis that circled Tesla’s stock post election. But the dustup between the two powerbrokers brings to light a major problem for Tesla’s stock as Musk tries to jumpstart a sagging EV business. There is a big disconnect between Tesla’s valuation and what’s happening underneath the surface. For example, Tesla’s stock is up 12% since October 2022 – yet, consensus EPS estimates for 2025, 2026 and 2027 have plunged 77%, 70% and 71% since then according to new research from JP Morgan auto analyst Ryan Brinkman. Further, the stock is valued at a significant premium to the broader market despite Trump likely doing away with EV tax credits soon. The tax credit has been a driver of Tesla’s sales and profits. EV subsidies represent about 52% of Tesla’s current profits, Brinkman estimates. For full episodes of Opening Bid, listen on your favorite podcast platform or watch on our website. Yahoo Finance's Opening Bid is produced by Langston Sessoms
