10:36 AM EDT, 06/09/2025 (MT Newswires) -- Tesla (TSLA) faces a market headwind as rising tensions between Musk and Trump, tied to expiring EV tax credits, risk further weakening demand, Argus Research said in a report Monday.

"We are lowering our intermediate-term rating on Tesla to [hold] as the stock appears to be currently trading on non-fundamental events, specifically the worsening tiff between the [US] president and the world's richest man," Argus said.

Argus warned that rising political tensions between Elon Musk and President Trump-escalating last week after Musk criticized a federal spending bill and Trump linked the backlash to expiring electric vehicle tax credits-have become a significant market factor for Tesla, the report said, adding that this "war of words," coupled with the end of EV credits, could further depress demand for new "Teslas."

Tesla reported adjusted Q1 earnings of $0.27 per share, down from $0.45 a year earlier and below analyst estimates, as revenue fell 9% to $19.34 billion and vehicle deliveries dropped 14% to 336,681 units, driven by lower average selling prices, higher operating costs, and production delays during a Model Y refresh.

Despite challenges, Tesla's energy storage division saw revenue jump 67% to $2.73 billion. The company also reaffirmed plans to launch its AI-driven "Cybercab" and Optimus robot in 2025, the report said.

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