In a move aimed at shoring up Tesla’s embattled fortunes, U.S. President Donald Trump purchased a red Tesla from CEO Elon Musk during a high-profile event at the White House on Tuesday.
The transaction, staged on the South Lawn with several Tesla models—including the troubled Cybertruck—was on display and was widely seen as a public endorsement of Musk and his company at a time when both were facing mounting opposition.
Trump, visibly impressed as he settled into a Model X, admired the vehicle, declaring, “That’s beautiful.” Moments later, he pointed to a red Model S, confirming it as his purchase. Musk, who has taken on an increasingly political role as the head of the Department of Government Efficiency (DOGE), showcased Tesla’s latest offerings, including the Cybertruck’s bulletproof exterior.
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The president’s embrace of Tesla comes as the electric vehicle maker battles a series of setbacks, including attacks, slumping sales, intensifying competition from Chinese rivals, and a sharp decline in stock value. Trump went a step further, vowing to classify recent attacks on Tesla dealerships as domestic terrorism, linking the vandalism to broader culture war grievances.
“They’re bad guys. They’re the same guys who screw around with our schools and universities,” Trump said. “We’re gonna catch you, and you’re gonna go through hell.”
However, analysts warn that Trump’s direct intervention may do more harm than good.
“Tesla is becoming a political symbol of Trump and DOGE, and that is a bad thing for the brand,” said Dan Ives, a financial analyst at Wedbush Securities. “You think it’s helping, but it’s actually hurting.”
Trump’s backing appeared to provide a temporary boost. Tesla stock, which had suffered one of its worst single-day sell-offs just a day earlier, rebounded after the president posted on his Truth Social platform that Musk was “putting it on the line” for America. He blamed Tesla’s struggles on “Radical Left Lunatics” allegedly conspiring to “illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ‘baby.’”
The stock surged even further when Trump formally announced his purchase at the White House. “I don’t like what’s happening to you,” he told Musk before selecting a red Model S, retailing for $80,000. As he eased into the driver’s seat, he repeated, “Wow. That’s beautiful.” Tesla shares closed nearly 4% higher Tuesday, but the broader outlook remains uncertain.
Tesla has been pummeled by competition from Chinese automakers, and Musk’s political entanglements have further complicated matters. Tesla showrooms in the U.S. have been targeted by protesters, and some owners—keen to distance themselves from the controversy—have taken to placing bumper stickers on their cars reading, “I bought it before Elon went nuts.”
Despite Trump’s endorsement, Tesla stock remains down 45% in 2025. On Monday, it tumbled over 15% to $222.15, its lowest point since October, reflecting deepening pessimism about the company’s prospects.
That decline could have serious consequences. Tesla’s stock-based employee compensation model means that many workers who were offered shares at a discount last year now find those stocks trading below the discounted price, making the incentive worthless. Additionally, Tesla’s ability to raise money through new stock offerings is now limited. The company previously raised $12 billion in 2020 to fund expansion and research, but with slumping sales and a declining stock price, future fundraising efforts could yield far less.
Musk’s growing political profile is also hurting Tesla. As the face of Trump’s aggressive government downsizing efforts under DOGE, Musk has championed federal worker layoffs and drastic spending cuts. But his focus on politics has reignited shareholder concerns that he is too distracted to effectively run Tesla, especially as his other ventures face mounting challenges.
X, Musk’s social media platform, crashed multiple times on Monday, an incident he blamed on a “massive” cyberattack. But experts pointed to his deep workforce cuts at the company as a likely factor. Meanwhile, SpaceX has also suffered setbacks, with a rocket exploding over Florida last week, just two months after another launch failure.
While Trump’s Tesla purchase was intended to serve as a lifeline for the struggling EV maker, the political baggage it carries could further polarize the brand. Analysts believe that instead of reassuring investors and customers, Musk’s alliance with Trump may be driving away those who see Tesla as increasingly entangled in America’s divisive political landscape.