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Trump-Musk Feud Triggers $150 Billion Wipeout in Tesla Market Value

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Tesla shares plummeted 14% on Thursday, erasing $150 billion in market value, as a public feud between U.S. President Donald Trump and Tesla CEO Elon Musk rattled investors. The stock selloff occurred despite no major company-specific news, as traders reacted to escalating tensions between the two high-profile figures.

The dispute began when Trump criticized Musk’s opposition to his administration’s tax bill, which includes provisions that would eliminate federal subsidies for electric vehicle (EV) purchases. Musk responded by attacking Trump’s policies on social media, further intensifying the confrontation. Trump later escalated his rhetoric, suggesting that terminating government subsidies and contracts with Musk’s companies could save the federal government billions of dollars.

The spat poses multiple risks for Tesla, especially as it tries to navigate a shifting regulatory landscape. The U.S. Transportation Department, which regulates vehicle safety standards, could become an obstacle to Musk’s ambitions of mass-producing autonomous robotaxis — a cornerstone of Tesla’s future growth strategy. The department is also investigating Tesla’s Full Self-Driving system following a fatal crash.

“Elon’s politics continue to harm the stock,” said Dennis Dick, chief strategist at Stock Trader Network. “First he aligned with Trump, upsetting Democratic buyers. Now he’s alienated the Trump administration.” Analysts warn that political fallout could also influence regulatory decisions that disproportionately affect Tesla, particularly if regulators mandate technologies like lidar, which Tesla currently avoids in favor of camera-based systems.

The market rout has also dented Musk’s personal wealth. Following Thursday’s selloff, his net worth fell by roughly $27 billion to $388 billion, according to Forbes.

Investors are increasingly concerned about Tesla’s exposure to political headwinds as well as its heavy reliance on government incentives. Trump’s budget proposal includes ending the popular $7,500 EV subsidy by late 2025, which could slash Tesla’s annual profit by $1.2 billion and hit regulatory credit sales by an additional $2 billion, according to J.P. Morgan estimates.

Despite these risks, Tesla remains the most valuable automaker globally with a market capitalization of around $1 trillion — more than triple that of Toyota. However, some investors question the stock’s lofty valuation, which trades at 150 times profit estimates. “I am short Tesla. I don’t understand its valuation or fundamentals. I think it’s overhyped,” said Bob Doll, chief investment officer at Crossmark Global Investments.

Tesla’s stock has been highly volatile since Musk endorsed Trump’s reelection bid in mid-2024. After an initial 169% surge, shares have since fallen 54% amid protests and weakening sales in major markets including Europe, China, and key U.S. states like California.

While Transportation Secretary Sean Duffy has already moved to ease some autonomous vehicle safety regulations, experts caution that federal regulators could still shape rules in ways that disadvantage Tesla. “With President Trump, being on his bad side always creates risk,” said Morningstar analyst Seth Goldstein, though he noted that broader industry pressure may limit targeted retaliation.

Ultimately, analysts suggest the political drama could overshadow Tesla’s ambitious AI and autonomous driving plans, which Wedbush previously valued at up to $1 trillion in potential market capitalization.

Xiaomi Set to Unveil ‘Tesla Rival’ YU7

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Xiaomi Prepares to Launch ‘Tesla Challenger’ YU7 Electric SUV

China’s tech giant Xiaomi is set to launch its highly anticipated YU7 electric sports utility vehicle (SUV) this Thursday, marking a significant step in the company’s expanding electric vehicle (EV) ambitions. Alongside the YU7, Xiaomi will also introduce other key products, including the Xring O1 mobile chip and the new Xiaomi 15S Pro smartphone, during the event. This launch comes after some disappointment from fans when the YU7 was notably absent from the Shanghai Auto Show last month.

The YU7 is widely viewed by industry analysts as a direct challenger to Tesla’s Model Y, which has dominated China’s EV market—the world’s largest by volume. Xiaomi entered the electric vehicle market only recently, with the launch of the SU7 sedan last year. Since then, the SU7 has reportedly outsold Tesla’s Model 3 on a monthly basis, highlighting Xiaomi’s rapid rise in the competitive EV segment. However, the company has faced setbacks, including a decline in SU7 orders following a tragic accident involving the model in March.

Lei Jun, Xiaomi’s founder and CEO, shared on his Weibo account that the upcoming launch event will showcase Xiaomi’s growing portfolio beyond EVs. The inclusion of the Xring O1 chip and the Xiaomi 15S Pro smartphone signals Xiaomi’s push to strengthen its hardware ecosystem, blending automotive, mobile, and smart devices into a connected future.

Meanwhile, competition in China’s smartphone market is heating up as rivals like Huawei and Apple increasingly rely on custom-designed chips to offer more integrated user experiences. Xiaomi’s move to develop its own mobile chip alongside its EV ambitions reflects the company’s broader strategy to diversify and deepen its foothold in both the automotive and technology sectors.

Kraken Launches Tokenized U.S. Equities for 24/7 Trading Outside U.S.

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Kraken, the crypto exchange, announced Thursday it is launching tokenized versions of U.S. stocks, including Apple, Tesla, and Nvidia, allowing investors outside the U.S. to trade equities 24/7 — a step toward bridging traditional finance and blockchain.

The product, called xStocks, provides digital tokens that represent ownership of publicly traded U.S. equities. Investors won’t directly hold the underlying shares, but rather tokens that mirror the stocks’ value, offering flexibility and round-the-clock access typically unavailable in traditional stock markets.

Key Details:

  • Availability: Limited to select markets outside the U.S.

  • Trading hours: Available 24/7

  • Not offered to: U.S. customers

  • Underlying equities: Includes high-profile companies such as Apple, Tesla, and Nvidia

Kraken did not disclose which countries or jurisdictions will have access to xStocks, but the move reflects the growing interest in tokenizing real-world assets.

Why It Matters

Tokenization — issuing blockchain-based digital versions of real assets — is increasingly being seen as a tool to:

  • Expand market access globally

  • Enable fractional ownership and enhanced liquidity

  • Offer trading during non-market hours, especially useful for international investors

“Tokenized securities could radically reshape how retail and global investors access financial markets,” proponents argue.

Earlier this year, Robinhood CEO Vlad Tenev endorsed tokenization in a Washington Post op-ed, suggesting it could also open access to private markets.

Broader Context

The launch comes as enthusiasm for blockchain intensifies, partly fueled by:

  • Bitcoin’s strong performance

  • Expectations of lighter regulation under U.S. President Donald Trump

  • Growing demand to integrate traditional assets into decentralized finance (DeFi) systems

While tokenized securities are still in their early adoption phase, Kraken’s initiative places it at the forefront of hybrid finance innovation, offering a glimpse into the future of global capital markets.