Tesla Stock Drops Amid Trump-Musk Tensions, Institutional Support Continues

Tesla stock has provided extraordinary returns since its 2010 IPO, with a $1,000 investment growing to about $269,000 today despite recent declines. However, Tesla shares have fallen over 25% year-to-date in 2025 amid weakening global demand, increased competition, and escalating tensions between President Donald Trump and Elon Musk, including Trump's threat to deport Musk and calls for investigations into Tesla's federal subsidies. This political conflict has contributed to Tesla's share price volatility, with the stock dipping nearly 8% following Trump's remarks linking Musk's companies to substantial government support. Despite these challenges, major institutional investors like Vanguard, Fidelity, and BlackRock maintain significant stakes in Tesla, underscoring its entrenched position in U.S. equity indices. Meanwhile, some leading hedge funds have reduced their Tesla holdings sharply in favor of other stocks like Cloudflare, reflecting concerns about Tesla's declining market share and recent revenue and delivery drops. The combination of political friction, operational setbacks, and shifting investor sentiment casts uncertainty on Tesla's near-term prospects, even as it remains a major player in the EV market.