Tesla Stock Drops. There’s Bad News on Batteries.

Coming into Friday trading, Tesla stock was down about 23% year to date and up about 18% over the past 12 months. (Tim Goessman/Bloomberg)

Tesla stock rose Friday to close out what was a difficult week for investors. Not only was there another spat between President Donald Trump and CEO Elon Musk, but investors also need to consider what a battery supplier’s actions mean for any recovery in sales of electric vehicles.

Tesla stock dipped early Friday but ultimately rallied, closing 1.2% higher at $313.51. The S&P 500 and Dow Jones Industrial Average finished 0.3% and 0.6% lower, respectively.

Coming into Friday trading, Tesla stock was down about 2% for the week. Shares dropped 7% on Monday after Musk, over the weekend, said he was starting a new political party, which drew criticism from Trump. An early June spat between the two men sent Tesla stock below $285.

Early on Friday, investors might have been thinking more about batteries and less about politics. Panasonic is slowing its ramp-up of battery production in the U.S., according to Nikkei. Panasonic and Tesla didn’t immediately respond to requests for comment.

Panasonic makes batteries in Nevada and has a sister plant in Kansas slated to host its grand opening this month. The Kansas plant was expected to reach full production of 30 gigawatt-hours of EV batteries annually by 2027. That goal is apparently under review amid slowing EV sales growth in America.

Up until recently, Panasonic expected U.S. electric vehicles to account for almost 30% of new car sales by the end of the decade. That was based partly on California and federal regulations that created incentives to produce EVs, and to buy them. Trump’s tax and spending bill, however, eliminates the $7,500 EV purchase tax credit. His administration is challenging California’s authority to regulate its air emissions, which underpins its efforts to press auto makers to make more zero-emission vehicles.

Both things are headwinds for sales of EVs, which account for less than 10% of new cars purchased in America. Fewer EVs need fewer batteries.

Panasonic’s primary U.S. customer is Tesla and its global sales dropped about 13% year over year in the first half of 2025. Panasonic management was asked in May if Tesla’s falling sales would pressure its battery business. At the time, Panasonic didn’t see a sales drop off, with the company picking up market share as Tesla moved away from Chinese suppliers, potentially to avoid tariffs.

Investors will get a chance to hear about regulations, politics, EV demand, and recovery when Tesla reports its second-quarter earnings on July 23.

Coming into Friday trading, Tesla stock was down about 23% so far this year and up about 18% over the past 12 months.

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