Tesla (TSLA, Financials) stock fell sharply on June 5 as a growing rift between President Donald Trump and CEO Elon Musk spooked investors. The stock slid 9% during the session, extending its decline to 12% since May 27, with volume reaching 100 million shares.

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Tesla's market value remains near $1 trillion, well above Toyota Motor's $290 billion. The stock trades at 140.21 times profit estimates. Analysts at J.P. Morgan project that eliminating the $7,500 EV subsidy could cut Tesla's annual profit by $1.2 billion and reduce regulatory credit sales by another $2 billion under separate Senate legislation.

Musk, calling the bill a disgusting abomination, has urged lawmakers to vote it down. Trump responded by saying he was disappointed in Musk, who had been aligned with the administration's Department of Government Efficiency plan. The political fallout comes as Tesla sales weaken in Europe, China, and key U.S. markets, even as broader EV demand rises.

The dispute adds new uncertainty around Tesla's public image and consumer base, with both Democratic and Republican buyers increasingly wary.

Investors should watch for further policy developments and consumer demand shifts ahead of Tesla's next earnings release.

This article first appeared on GuruFocus.