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Tesla’s troubles are deeper than you think

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CNN
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Tesla’s troubles go far beyond CEO Elon Musk’s recent dust-up with President Donald Trump, who accused the former “first buddy” of going “completely ‘off the rails’” in a social media slap fight over the weekend.

But while the battles between Musk and Trump are getting all the attention, the outlook for Tesla’s revenue and bottom line have has gotten notably worse. And the company could even be back to losing money, for reasons unrelated to Musk’s personal politics.

Musk was Trump’s largest financial supporter during the 2024 campaign, and was a mainstay at Mar-a-Lago and the White House at the start of Trump’s second term, with his role in slashing the federal workforce at the Department of Government Efficiency (DOGE). But Musk has since announced he was starting a new political party due to his displeasure with the tax and spending bill signed by Trump on Friday — and the barbs on their respective websites have only increased since then.

Shares of Tesla closed Monday down 6.8%, as investors were concerned about the implication of Musk’s latest political moves, despite his promises to re-focus on the company.

“Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” wrote Dan Ives, an analyst at Wedbush Securities who’s known for being optimistic about the company.

Ives put out a follow-up note Tuesday saying that the Tesla board should set ground rules to limit Musk’s political activities because the company is at a “tipping point” for its future.

“Tesla is heading into one of the most important stages of its growth cycle with the autonomous and robotics future now on the doorstep and cannot have Musk spending more and more time creating a political party which will require countless time, energy, and political capital,” he wrote.

Still, Ives maintained his buy recommendation and $500 price target for the stock in his note. But analysts at William Blair cut their recommendation on the stock to “market perform” or neutral, and also cut their earnings forecast for the company.

Because even without the political stink, the Tesla’s financial outlook is suddenly looking notably worse.

Tesla did not respond to requests for comment.

Blair’s note pointed out that Trump’s bill not only removed the $7,500 tax credit for electric vehicle (EV) buyers, but also eliminated the financial penalties for automakers that fail to meet federal emissions targets. Emissions fines have historically forced automakers who still build primarily gasoline powered cars and trucks to buy “regulatory credits” from EV companies.

Removing those fines eliminates “market demand for Tesla’s credits,” said the note from William Blair analysts Jed Dorsheimer and Mark Shooter. The sale of those federal and state credits added $10.6 billion to Tesla’s bottom line since 2019 and often enabled the company to post a profit.

Without the revenue from those regulatory credits, the company would not have reported a positive annual net income until 2021, and it would have been back in the red again in the first quarter of this year, when its net income plunged 71% compared to a year earlier on sharply lower sales around the globe.

Musk has largely downplayed all the recent bad news, saying the company’s future rests on robots, artificial intelligence and self-driving taxis.

But the company’s taxi service is very limited to date, launching only in Austin, Texas, for a select group of customers – mostly Tesla fans – and with a Tesla employee riding in the front passenger seat to monitor the car’s performance. That puts Tesla behind the robotaxi service already offered in Austin and three other cities – San Francisco, Los Angeles and Phoenix – by Waymo, the self-driving car unit of Google parent Alphabet.

And Tesla’s rollout has had its shares of problems, including a video showing a robotaxi traveling on the wrong side of the road for about half of a block and another video of a robotaxi slowly turning its front wheels into a parked car.

While Musk has promised his robotaxi service will be expanding soon across many other cities, he has not given any further details. He also hasn’t said when the Austin service will be expanded to the general public, nor when the company’s human monitors sitting in the front passenger seat will no longer be needed.

Meanwhile, Waymo has definitive plans to expand its service to Miami and Washington, DC, next year in partnership with Uber.

“We expect that investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics,” said the William Blair note. “We would prefer this effort to be channeled towards the robotaxi rollout at this critical juncture.”

Drop in demand likely to continue

Then there’s the problem of Tesla’s sales. Or rather, the lack thereof.

Global sales were down a record 13% in each of the first two quarters of this year, compared to a year earlier, even though demand for EVs overall continues to climb, a further sign of Tesla’s declining market share.

Part of the lost EV market share is due to increased competition, both from Western automakers rolling out their own EV offerings, and Chinese automakers that have made a massive push into the market. Chinese automaker BYD is poised to surpass Tesla in global annual EV sales this year for the first time, even though Tesla is a still a major player in China, and BYDs are not sold in the US.

BYD electric cars wait to be loaded to the automobile carrier BYD

Demand is likely to weaken further come October 1, when the $7,500 tax credit for electric car buyers expires. When a previous version of the tax credit was phased out for Teslas in 2019, the company had to cut the price of the car by about half the value of the lost credit.

But Tesla has also faced missteps of Musk’s own doing. There has been backlash against Musk’s political activity, which has had a significant impact on Tesla sales. That is likely to continue even as he moves to distance himself from Trump.

In the early months of this year, hundreds of protests were held outside Tesla showrooms in the United States, Canada and Europe. Worries about self-inflicted brand damage started the company’s shares on their downward slide.

It prompted Trump, who was still Musk’s ally at the time, to announce he was buying a Tesla for himself. In March, the president hosted an event at the White House urging others to buy the company’s cars. At one point, Musk and Tesla investors might have hoped that in a closely divided country, the lost sales to Trump critics might be at least partly made up for by sales to Trump fans.

But Musk seems to now face the possibility of backlash from both sides of the political spectrum.

“He’s been able to alienate everyone, which many thought was impossible, but he’s actually been able to do it,” Ives told CNN Monday. “And the problem is, this soap opera just keeps going on.”



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Texas flooding death toll climbs to 119 as search for more people continues | Texas floods 2025

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The number of people who have died from the flooding in Texas continues to rise, with at least 119 dead throughout the state, officials said on Wednesday morning.

Search crews continue to look for people, as residents and news organizations question the government’s alarm and warning systems.

In Kerr county, the area that was worst affected by last Friday’s flood, officials said on Wednesday morning that 95 people had died. The other 24 people who have died are from surrounding areas. The Kerr county sheriff said 59 adults and 36 children had died, with 27 bodies still unidentified.

People are slowly returning to their properties to survey the damage from the devastating flash flood, as local officials continue with rescue, recovery and cleanup efforts.

There are 161 people believed to be missing in Kerr county due to the flash floods, making up the majority of the 173 missing in the entire state. Camp Mystic, the all-girls Christian camp that was gravely affected by the flood, still has five campers and one counselor missing.

As cleanup efforts continue, more and more people are scrutinizing the government’s alert system to warn people before the flood. Journalistic investigations have revealed that first responders asked that a mass-alert system in Kerr county be triggered on Friday morning. The alert system sends text messages and “delivers pre-recorded emergency telephone messages” to some people in the area.

Dispatchers delayed a 4.22am request from volunteer firefighters for an alert to be sent, saying they needed special authorization, according to reporting from Texas Public Radio (TPR) based on emergency radio transmissions they reviewed. Some residents received flood warnings within an hour. Others told TPR they did not receive an alert until 10am – nearly six hours after first responders’ request. A separate story from KSAT confirms TPR’s reporting.

There are inconsistencies regarding local officials’ response. In his first press conference on 4 July after the flood, the Kerr county judge said the area did not have an emergency alert system.

“I believe those questions need to be answered, to the families of the missed loved ones, to the public, you know, to the people who put me in this office. And I want that answer and we’re going to get that answer,” the Kerr county sheriff, Larry Leitha, said.

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“We’re not running, we’re not going to hide. That’s going to be checked into at a later time.”

There are no outdoor weather sirens to blast alerts in some communities in the area. Since 2015, Kerr county officials have applied for grants for a flood warning system, the New York Times reported. For years, officials have also warned the series of summer camps in the area of incoming floods by word-of-mouth. A Change.org petition was launched after the flood for an early warning siren system and has more than 35,000 signatures.

Rescue and recovery efforts are continuing. The Kerr county sheriff’s department is working on rescue and recovery efforts, the sheriff said, adding that it was an “all hands on deck” situation.

During Wednesday’s press conference, local officials asked people to be careful and give search crews space during their efforts. “We are using very heavy equipment” to search and clear up fallen trees and debris, a sheriff official said.

On Sunday, the Trump administration declared the flooding a “major disaster” and deployed federal resources to assist the state.

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Trump’s push to claw back funding ignites a fight that threatens a government shutdown

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WASHINGTON — President Donald Trump’s push for Republicans to bypass Democrats and claw back $9.4 billion in approved spending has ignited a new fight in Congress that could upend the normally bipartisan government funding process.

Ahead of a Sept. 30 deadline to prevent a shutdown, Senate Minority Leader Chuck Schumer, D-N.Y., is laying down a marker by warning that Democrats won’t sign off on an agreement if the GOP follows through with Trump’s request.

“If Republicans cave to Donald Trump and gut these investments agreed to by both parties, that would be an affront — a huge affront — to the bipartisan appropriations process,” Schumer said. “It is absurd to expect Democrats to play along with funding the government if Republicans are just going to renege on a bipartisan agreement by concocting rescissions packages behind closed doors that can pass with only their votes, not the customary 60 votes required in the appropriation process.”

Schumer’s warning represents a bold gambit that heightens tensions ahead of another government funding showdown — just months after a group of Senate Democrats backed down from a previous showdown and drew heavy backlash from their base.

The dynamics are the product of a quirk in Senate rules. Funding the government is subject to the filibuster, requiring 60 votes, but a separate —and rarely used — process allows for canceling some approved spending with a simple majority vote.

The rescissions package would slash $8.3 billion in foreign aid and $1.1 billion from the Corporation for Public Broadcasting, which funds PBS and NPR. It flows from efforts by Elon Musk’s erstwhile Department of Government Efficiency, or DOGE, to find savings.

It passed by House last month by a vote of 214-212. It’s unclear if the Senate, where Republicans control 53 seats, has enough votes to pass it. Some GOP senators want to make changes, which would send it back to the House.

Democrats staunchly oppose the rescissions package, which was crafted without their input. Republicans can pass the $9.4 billion in cuts on party lines, but if that leads to Democrats refusing to sign off on a new government funding deal, it could trigger a shutdown at the end of September.

Senate Majority Leader John Thune, R-S.D., said Wednesday he will bring up the rescission package “next week” and that it will be subject to an open amendment process.

Thune said he was “disappointed” to see Schumer “implicitly threaten to shut down the government.”

“But I’m hopeful that that is not the position of the Democrat Party, the Democrat conference here in the Senate, and that we can work together in the coming weeks to pass bipartisan appropriations bills,” the majority leader said.

Congress has a deadline of July 18 to send the rescissions package to Trump’s desk, or let it dissolve.

Even some Republicans worry that canceling spending on party lines would harm the traditional appropriations process.

“And the reason for that is because, if you do appropriations in the Senate, you have 60 votes to support it. If you do rescissions, you can take it back with 50, which then makes it tougher to get a bipartisan agreement on an appropriations package,” Sen. Mike Rounds, R-S.D., who sits on the Appropriations Committee, told NBC News. “We are aware of the sensitivities of using a rescissions package versus the appropriations process.”

Beyond that, Rounds said the measure must be revised to protect rural broadcast stations who could lose critical funding.

“We have to have a fix, for sure, on those rural radio stations. Basically 90% or more of their resources are taken away by the rescissions package,” he said. “OMB has agreed to work with us, and now we’re in that process of finding the appropriate path forward where they do not lose their funding.”

And Sen. Susan Collins, R-Maine, the Appropriations Committee chair, said she opposes some parts of the measure.

“For my part, I believe it needs some significant changes,” Collins said, citing the President’s Emergency Plan for AIDS Relief (PEPFAR) as a program she “can’t imagine why we would want to” cut funding from.

Sen. Thom Tillis, R-N.C., said he’s inclined to support the measure, but he’s reviewing parts of it, including PEPFAR.

“I’m fine with the majority of it,” Tillis said. “We’re just looking at any of the national security impacts, any nexus there that would raise concern.”

Schumer’s threat to block an appropriations deal would require at least 41 of the 47 Democrats to rally against it, a level of unity they failed to achieve in March during a contentious spat over a looming government shutdown.

Sen. Tammy Baldwin, D-Wis., an Appropriations Committee member, said if Trump and the Republican majority “can undermine the appropriations process by rescinding bipartisan funding on a simple majority vote, that presents real challenges to the appropriations process.”

“Moving forward, it’s our job, in the next few days to make sure that Republicans know that this would be a major trust factor in moving forward with our appropriation bills,” she said.

Bobby Kogan, a former Senate Democratic budget aide who is now at the liberal Center For American Progress, said the GOP effort could break the appropriations process as its currently known.

It doesn’t help, he added, that Trump and his party already modified part of government funding with a major increase in spending for the military and immigration enforcement under the party-line megabill the president signed into law last week.

“This all risks a lot more shutdowns. Republicans are looking at breaking appropriations deals on both sides of the ledger: spending more on the things they like and less on the things they don’t like,” Kogan said. “If you can break bipartisan appropriations deals with partisan rescissions packages, that is going to be the end of bipartisan appropriations.”



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Trump slaps 50% tariff on Brazil over Bolsonaro trial, trade deficit

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U.S. President Donald Trump answers questions during a multilateral lunch with African leaders in the State Dining Room of the White House July 9, 2025 in Washington, DC.

Win McNamee | Getty Images

President Donald Trump said Wednesday the U.S. will slap a 50% tariff on Brazil‘s imports, partly in retaliation for the ongoing prosecution of the country’s former president, Jair Bolsonaro.

Trump said in a letter that the new tariff — a massive jump from the 10% rate the U.S. imposed on Brazil in early April — is also being imposed in response to the “very unfair trade relationship” between the two countries.

The letter to Brazil’s current president, Luiz Inacio Lula da Silva, followed nearly two dozen others that Trump has recently sent to other world leaders, dictating steep new tariff rates on the goods they sell to the U.S.

But the letter to Lula goes further than the rest, by imposing a new U.S. import tax rate explicitly as a punishment for a country engaging in internal political and legal affairs that Trump dislikes.

The value of Brazil’s currency, the real, fell more than 2% against the U.S. dollar following Trump’s announcement.

Trump has previously sounded off on Brazil over its treatment of Bolsonaro, a vocal ally of the U.S. president who is standing trial over his role in an alleged coup to overturn his 2022 reelection loss.

Trump called the situation “an international disgrace” in the letter, which he shared publicly in a Truth Social post.

Trump also claimed that Brazil’s trade policies have caused “unsustainable Trade Deficits against the United States,” which threaten the U.S. economy and national security.

But the U.S. has a goods trade surplus with Brazil, which totaled $7.4 billion in 2024, according to the Office of the U.S. Trade Representative.

The U.S. is also launching an investigation into potential unfair trade practices by Brazil, Trump wrote in the letter.

He said that probe is based on “Brazil’s continued attacks on the Digital Trade activities of American Companies.”

This is breaking news. Please refresh for updates.



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