Prominent Wall Street short seller Jim Chanos has called attention to the billions in federal subsidies received by Tesla Inc. TSLA and its customers, amid growing scrutiny of CEO Elon Musk‘s political activities and declining sales in key markets.
What Happened: Chanos’s comments came after Tesla’s Cybertruck was confirmed eligible for a $7,500 federal tax incentive, Cybertruck is now starting at $72,490.
“While you work up (justifiable) outrage over the worst of USAID’s silly foreign grants, don’t forget to ignore the tens of billions of US Taxpayer dollars that Musk’s companies and customers continue to receive annually,” Chanos wrote on X.
The criticism follows Musk’s recent announcement that President Donald Trump agreed to shut down the U.S. Agency for International Development (USAID), an agency responsible for billions in humanitarian aid and development funding.
Why It Matters: Tesla’s political entanglements come as the company faces challenges in its largest EV market. California registrations dropped 12% in 2024, outpacing the company’s national sales decline of 5.6%. The company’s market share of zero-emission vehicles in California fell from 60.1% to 52.5% year-over-year, according to the California New Car Dealers Association.
The sales decline coincides with Musk’s increased political involvement, including a reported $288 million investment in supporting Trump’s presidential campaign. Brand Finance reports that Tesla’s brand value decreased by $15 billion in 2024, dropping from 18th to 36th place in global brand rankings.
Adding to the complex political landscape, Musk has recently been appointed as a “special government employee” to lead Trump’s Department of Government Efficiency initiative. While unpaid, the position grants Musk significant oversight of federal systems while potentially bypassing certain disclosure requirements typically applied to government employees.
Price Action: Tesla’s stock closed at $383.68 on Monday, down 5.17% for the day. In after-hours trading, the stock rebounded 1.39% to $389.01, according to data from Benzinga Pro.
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