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3471Tesla shares took a sharp hit on Thursday, dropping 14% as a public feud between Elon Musk and President Donald Trump escalated on social media.
Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management and a longtime Tesla investor, was very direct about what he thought.
In an interview with Yahoo Finance, he says part of Tesla’s stock value came from the ‘Elon premium’, the idea that Musk’s image and ties to government helped the company.
“Now there’s going to be a retaliation against Tesla from Trump and Trump supporters that’s going to be a lot worse than what Elon realizes,” Gerber said.
“There’s a lot more MAGA supporters out there than Elon supporters.”
“A Disaster of Epic Proportions”
Speaking with Yahoo Finance, Gerber said the fallout is a nightmare scenario for Musk’s businesses.
“This is a disaster of epic proportions for Tesla and SpaceX,” he said.
“Whether Elon wants to accept it or not, he did help Trump get elected; it is his fault that Trump is the president of the United States.”
Musk recently criticized the Trump-backed spending bill, calling it a “disgusting abomination,” which appears to have sparked the back-and-forth.
Gerber believes Musk miscalculated by provoking Trump, who still holds significant power.
“Elon in his ego and sort of weird haze of reality actually thinks he’s more powerful than Trump,” he said.
“This, as a shareholder, couldn’t be worse.”
EV Tax Credits at the Center
One of the biggest concerns is Trump’s promise to eliminate electric vehicle tax credits, which Gerber says will hit Tesla hard.
“This is the death blow to Tesla,” he said.
“Taking away the credits just makes the car $7,500 more expensive for people … that obviously results in lower demand, which is already low.”
Musk has said he doesn’t need tax credits, but Gerber disagrees.
“Of course they need the tax credits,” he said, pointing to basic economics: cheaper products sell more.
Gerber argues that Tesla’s stock had been inflated by what he calls the “Elon premium”, the idea that Musk’s persona and government connections would benefit the company. That narrative is now collapsing.
Investor Fallout and Legal Threats
Gerber’s firm once owned over 500,000 Tesla shares. Now it holds less than half that. “I lost over $10 million today,” he said.
While he’s not planning to sue personally, he believes Tesla’s board could face lawsuits for “utter and complete negligence.”
He said his firm has been selling Tesla stock since Musk’s acquisition of Twitter and will likely continue unloading shares in the coming months.
Shaky Future for Tesla
While Tesla enjoyed a recent bump in stock price due to excitement around its AI and robo-taxi ambitions, Gerber says that hype doesn’t change the fundamentals.
“It doesn’t change the fact that it’s an EV company that sells EVs for almost 100% of its revenue,” he said.
With Musk alienating a major political figure and consumer base, Gerber is worried.
“I’m just extremely worried about the company’s future,” he said.
The fight between Musk and Trump may be personal, but the financial consequences are very public, and they’re piling up fast.
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