The Trump-Elon Musk Feud Creates More Problems for Tesla

Elon Musk’s bitter falling-out with President Trump could be costly for Tesla.

As long as he is persona non grata in the Trump administration, Mr. Musk, the chief executive of Tesla, will struggle to persuade Republicans not to gut climate policies worth billions of dollars to the electric car and battery company.

Mr. Musk may also lose sway over federal regulators who could make or break his plans to deploy driverless taxis, which he has described as the future of the company.

Tesla is already suffering steep declines in sales and profit. The company’s share price plummeted 14 percent on Thursday, its biggest one-day decline, after Mr. Musk and Mr. Trump began insulting each other on social media. The stock recovered somewhat Friday, rising nearly 4 percent, perhaps on hopes that the men would reach a truce or because investors thought the stock was now a bargain after the previous day’s drop.

There was always a disconnect between Mr. Musk and his Republican allies on electric cars. The domestic policy bill passed by House Republicans and being considered by the Senate will hurt the electric car market in the United States, where Tesla is the largest manufacturer by far.

The bill would eliminate tax credits of up to $7,500 for people who buy electric cars. It would quickly phase out subsidies for battery factories and lithium refineries, and end financial support for electric vehicle charging stations. The bill imposes an annual fee of $250 on electric vehicle owners that environmental groups say is punitive.

Those measures would hurt all carmakers that sell electric vehicles. But the Trump administration and Republicans in Congress are also trying to kill regulations that are especially beneficial to Tesla. Those rules allow Tesla to sell clean air credits to other carmakers that fail to meet environmental standards.