Tesla Stock Is Falling. Musk vs. Trump Is Still the Main Event.

Through Tuesday’s close, Tesla stock was down about 26% year to date and up about 14% over the past 12 months. (Dreamstime)

Tesla stock fell Wednesday, failing to build on a modest Tuesday rebound. It began the week deep in the red as investors sold in response to renewed sparring between CEO Elon Musk and President Donald Trump.

Shares of the electric-vehicle maker were up early but gave up gains and finished down 0.7% at $295.88. The S&P 500 and Dow Jones Industrial Average added 0.6% and 0.5%, respectively.

Shares brushed off a small target-price increase from RBC analyst Tom Narayan. He raised his call to $319 from $307 a share in a Tuesday report discussing the outlook for car manufacturers’ earnings. Narayan expects positive news about robo-taxis from Tesla’s earnings conference call.

Another factor affecting Tesla trading was the departure of X CEO Linda Yaccarino. She announced her resignation on Wednesday.

“It’s the latest evidence that Musk’s mercurial personality makes him a tough guy to work for,” said Battleroad Research analyst Ben Rose. “I don’t think this has a direct impact on Tesla. I am sure there is a next man or woman up at X to take over.”

Tesla shares rose 1.3% on Tuesday after falling 6.8% on Monday. The drop came after Musk announced plans to form a new political party. Trump, in response, called Musk a “train wreck” and said at a Tuesday cabinet meeting that a third party wouldn’t hurt Republican candidates.

It was the second significant flare-up between the two men, who exchanged barbs on social media as Tesla shares dipped below $285.

Wedbush analyst Dan Ives suggested on Tuesday that Tesla’s board should move to rein in Musk, mandating ground rules for his political activity while offering a new compensation package. Musk responded to the idea on X, saying, “Shut up, Dan.”

Investors will likely be thinking about politics and their impact on Musk and Tesla for at least a couple of additional weeks, despite more important issues facing the company. Tesla reports second-quarter earnings on July 23. It will be a chance to hear directly from Musk about a host of issues facing the company.

There is a lot to talk about beyond politics. Tesla launched its robo-taxi service in Austin, Texas, on June 22. Investors will want an update about performance and service expansion.

Tesla’s EVs have taken a back seat to robo-taxis lately. Vehicle sales fell about 13% in the first half of the year. Investors will be looking for signs that sales will improve in the second half of 2025. A new, lower-priced Tesla model could help. One was promised by management for 2025, but no one has seen the new car yet.

Ives rates Tesla stock at Buy and has a Street-high $500 price target, according to FactSet. Overall, 44% of analysts covering Tesla stock have Buy ratings. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla stock is about $313.

Coming into Wednesday trading, Tesla stock was down about 26% year to date and up about 14% over the past 12 months.

Write to Al Root at allen.root@dowjones.com