Tesla Faces Financial Decline Amid CEO Political Fallout, Subsidy Loss

Tesla is facing significant financial and market challenges in 2025, exacerbated by CEO Elon Musk's political activities and recent U.S. policy changes. The passage of President Donald Trump's "Big Beautiful Bill" has eliminated the $7,500 federal EV tax credit for consumers and removed corporate average fuel economy (CAFE) fines, which directly threatens Tesla's profitability by cutting off a major source of regulatory credit revenue—$2.8 billion in 2024 alone. Analysts warn that this legislation, combined with declining vehicle deliveries and increased competition, is causing investor unease and a drop in Tesla's stock price. Musk opposed the bill, calling it an "abomination," but the company is now forced to seek regulatory credit sales in other markets to offset losses in the U.S. Meanwhile, other EV companies like Jeff Bezos-backed Slate Auto are also impacted by the tax credit removal, potentially increasing vehicle prices and reshaping the competitive landscape. Overall, Tesla's financial outlook appears uncertain amid policy shifts, market pressures, and internal challenges.