Sales are hardly Tesla’s only problem. The company saw a 71% drop in net income in the first quarter. Its showrooms have been pummeled with protests. The Cybertruck is a flop. Republicans and Democrats say they are less likely to buy a Tesla now than they were before Musk’s stint in the White House, according to a new Electric Vehicle Intelligence Report released Tuesday. And, as my colleague Chris Isidore reported last month, it’s actually worse than all of that. If you look closely at Tesla’s first-quarter earnings, you’ll see that Tesla is losing money on what should be its core business: selling cars. In short, Tesla only managed a $409 million profit last quarter thanks to the sale of $595 million worth of regulatory credits to other automakers. But if Trump succeeds in passing his signature spending bill, those credits will evaporate. That’s just one of many reasons investors like Ives are hoping that Musk and Trump can bury the hatchet (or, at the very least, that Musk can keep his mouth shut for five minutes). Tesla relies on credits to stay profitable, but it also needs favorable regulations just to give it a fighting chance at competing with rivals like Waymo, the Alphabet-owned driverless taxi company that’s already running circles around Tesla. Tesla shares, the backbone of Musk’s personal fortune, are down 37% from their post-election peak, when Musk was becoming a fixture at Mar-a-Lago. The thinking on Wall Street back then was that Tesla’s problems were manageable , and that any blowback from the company’s liberal base would be outweighed by the benefit of having Musk in the White House, influencing regulations. It might have worked, briefly. But the pair’s falling out now has investors worried Trump will aim his retribution directly at Tesla. As the Musk-Trump feud reignited Monday, Tesla shares sank 2%. They fell another 5% on Tuesday, missing out on the broader stock market rally. The message may be getting through to Musk. After Trump commented that DOGE, the committee Musk set up to slash the federal bureaucracy, could be a “monster” that will “go back and eat Elon,” Musk seemed to hold back. Kind of. “So tempting to escalate this. So, so tempting,” he wrote on X. “But I will refrain for now.” Related