Ethics experts are raising alarm over members of the Donald Trump administration openly promoting Elon Musk’s Tesla Inc. TSLA, even as the electric vehicle company faces public backlash and its stock continues to slide.
What Happened: On Wednesday, Commerce Secretary Howard Lutnick appeared on Fox News and encouraged viewers to buy Tesla stock.
“If you want to learn something on this show tonight, buy Tesla,” Lutnick said on Jesse Watters’ program. “It’ll never be this cheap again.”
The remarks come as Tesla shares have dropped over 38% year-to-date.
Ethics experts say the administration’s behavior crosses a line, according to a report by Business Insider.
“It’s an ethics issue, and it’s an optics issue,” said Jordan Libowitz, head of communications for the Citizens for Responsibility and Ethics in Washington. “When someone spends hundreds of millions of dollars to elect a president and then that president’s administration takes action that appears to be an attempt to boost that person’s net worth.”
Richard Painter, former ethics counsel under George W. Bush, was more blunt.
“The idea of promoting a company, the White House doesn’t do that,” he stated. “The Commerce Secretary is not Jim Cramer.”
Why It’s Important: The decline in Tesla’s stock value has been exacerbated by Musk’s involvement with President Trump’s Department of Government Efficiency.
This has raised questions about Musk’s ability to manage his responsibilities at both Tesla and DOGE.
President Trump has also publicly supported Musk and Tesla, hosting what was effectively a promotional event at the White House last week.
He posed for photos in front of Teslas on the South Lawn and pledged to buy a Model S, though it remains unclear if he followed through.
The endorsements come amid growing backlash. Musk, who also leads the Department of Government Efficiency, has faced #TeslaTakedown protests following mass layoffs.
Additionally, Tesla has experienced a surge in trade-ins, with a record number of vehicles being traded this month. This follows protests against Musk’s role with the Trump administration and DOGE.
Despite these challenges, Cathie Wood of Ark Invest has continued to bet on Tesla, acquiring 9,351 shares of the automaker. This purchase, valued at approximately $2.21 million, comes amid Tesla’s recall of over 46,000 Cybertrucks due to safety concerns.
Price Action: Tesla’s stock rose 5.27% during Friday’s regular session, closing at $248.71. In after-hours trading, it added another 0.30%, reaching $249.45, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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