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Tesla (NASDAQ: TSLA) shares jumped 4% Tuesday after U.S. President Donald Trump purchased a new Tesla to support CEO Elon Musk. Trump praised Musk for his leadership and cost-cutting efforts under the Department of Government Efficiency (DOGE), despite growing backlash over layoffs and funding cuts.
“The Radical Left is trying to boycott Tesla, but I’m buying one to show confidence in Elon,” Trump posted on social media Monday. On Tuesday, Musk personally handed Trump a red Model 3 at the White House. While Trump cannot drive as a former president, he said the car would be used by his staff.
Musk lauded Trump’s policies and announced Tesla will double U.S. production within two years. Meanwhile, Tesla faces increasing protests and vandalism in the U.S. and Europe, as critics slam Musk’s perceived ties to right-wing politics. The company’s reputation among climate-conscious, left-leaning consumers is at risk, contributing to its first annual sales decline in 2024.
European sales also plunged in January amid fierce competition from Chinese and local automakers. With Tesla shares down 45% in 2025, analysts remain divided. Morgan Stanley’s Adam Jonas sees potential for a rebound to $800, citing upcoming AI and robotaxi developments. Wedbush’s Dan Ives, however, urges Musk to refocus on Tesla rather than DOGE.
Musk, also leading SpaceX and xAI, insists DOGE is exposing government waste and vows to continue despite mounting challenges. As Tesla navigates brand damage and weak sales, investors are watching whether Trump’s endorsement and future innovations can restore market confidence.
