Musk-Trump Feud Over EV Tax Credits Spurs Market Volatility in Tesla and Crypto Sector
Ongoing tensions between Elon Musk and former President Donald Trump have escalated as the White House affirmed Musk’s right to represent his companies amid a heated policy dispute. Musk left his government advisory post and openly criticized Trump’s proposed ’big, beautiful bill’, which seeks to eliminate the $7,500 federal tax credit for electric vehicles (EVs). JPMorgan analysts project that removal of the tax credit could result in a $1.2 billion annual profit loss for Tesla, with potentially greater losses from scrapped emissions credit sales. The White House further intensified the feud by rescinding the NASA nomination of Jared Isaacman, a close Musk ally, seen as an attempt to limit SpaceX influence. Social media discussions point to Musk’s desire to maintain business advantages and political sway as motivating factors behind his opposition to the bill. The controversy has already triggered significant volatility in Tesla shares, with broader spillover into related assets, including Dogecoin (DOGE), which recorded a 10% drop. For crypto traders, this high-profile dispute and shifting policy landscape have generated market uncertainty and negative sentiment, particularly for digital assets tied to Musk or the EV/clean tech sectors.
Bearish
The Musk-Trump conflict over electric vehicle tax credits and reduced support for clean tech has caused notable volatility in both Tesla shares and cryptocurrencies linked to Musk, such as Dogecoin. With Tesla facing potentially heavy financial losses and further political risk, negative sentiment has already hit related crypto assets—DOGE dropped 10% on the news. The revocation of key appointments and threat to valuable industry incentives add short-term uncertainty and pressure to the broader market. Historically, similar policy-driven selloffs have weighed on digital assets with perceived ties to impacted companies or individuals. While long-term effects could moderate if regulatory clarity improves, the immediate outlook is bearish for DOGE and other Musk-associated crypto, as traders price in regulatory headwinds and company-specific risks.