Electric vehicles are expected to take a hit under the existing reconciliation budget proposal, but that isn’t the only provision that would seemingly hurt Elon Musk and his business if passed as written.

The drop comes as shares of the EV maker saw a 22% rally in May with Musk wrapping up his time as head of Trump's Department of Government Efficiency, or DOGE.

Elon Musk’s bitter falling-out with President Trump could be costly for Tesla. As long as he is persona non grata in the Trump administration, Mr. Musk, the chief executive of Tesla, will struggle to persuade Republicans not to gut climate policies worth billions of dollars to the electric car and battery company.