Elon Musk and US President Donald Trump
Credit: Reuters Photo
President Donald Trump praised Elon Musk and said he would buy a "brand new Tesla" despite railing against electric cars in the past, after shares in the electric-car maker plunged to their lowest point since before Election Day.
Tesla's stock price rose sharply after Trump's election and Musk's appointment as the Trump administration's de facto cost-cutting czar. But on Monday, shares in the company were down more than 15 per cent for the day, and more than 50 per cent from a mid-December peak, as investors registered the impact of falling sales and angry protests over the high-profile political role that Musk, who is also Tesla's CEO, has taken on.
Defending his political ally and key donor, Trump said in a post on Truth Social late Monday that Musk was doing a "fantastic job," but argued that "radical left lunatics" were trying to boycott the vehicle manufacturer.
"In any event, I'm going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American," he said. Musk thanked the president in a post on social media and Tesla's share price was up slightly in premarket trading Tuesday.
Trump's defense of Tesla comes after an executive order signed in January that, among other things, erased tax credits for electric vehicles, presenting a challenge to automakers that have invested billions of dollars in the industry. The president has previously said supporting the industry was "lunacy" but admitted last year that he would back the sector because of Musk's support.
Investors had initially hoped that Musk's financial support for Trump's election campaign and his prominent role in the president's orbit would benefit Tesla, and sent its share price to record highs. But Musk's involvement in the administration has proved divisive, with some worrying that he has not been spending enough time managing the company when sales of its cars are dropping.
Musk has drawn backlash for his deep cuts to federal agencies, led by the cost-cutting initiative he has called the Department of Government Efficiency. That anger has seen Tesla become a target for demonstrations and boycotts, with Tesla charging stations set on fire near Boston and shots fired at a Tesla dealership in Oregon last week.