Tesla shares plunged 14.2% by the close of trading on Thursday, erasing around $152 billion from the company’s market value as tensions between Elon Musk and Donald Trump spilt into the public eye.
The former allies exchanged barbs and threats across social media throughout the day, coinciding with the sharp drop in Tesla’s stock price.
Trump, posting on Truth Social, hinted at cutting federal subsidies and contracts that have significantly benefited both Tesla and SpaceX. In response, Musk lashed out, calling for Trump’s impeachment, criticising his tariff policies, and alleging ties to convicted sex offender Jeffrey Epstein.
He also threatened to retire the SpaceX spacecraft relied on by NASA for key missions, though later that evening, Musk confirmed the spacecraft would remain in service.
The company has faced headwinds throughout the year, grappling with slowing sales and growing resistance from consumers globally, many of whom are turning away from the brand due to Musk’s ties to far-right politics. According to the Wall Street Journal, traders who had shorted Tesla stock profited handsomely amid the fallout from Musk’s public clash with Donald Trump.
The feud marks a sudden and dramatic escalation in the growing rift between two of the world’s most influential figures. Elon Musk, who previously donated around $275 million to Donald Trump’s 2024 presidential campaign and led the administration’s cost-cutting “Department of Government Efficiency” (Doge), had been a close political ally.
Now, the fallout is drawing heightened investor concern over potential repercussions for Musk’s business empire—particularly the risk of cancelled government contracts or tougher regulatory scrutiny for companies like Tesla.
Tensions reportedly began when Musk publicly opposed the administration’s new tax bill, which scraps electric vehicle tax credits and is projected to add $2.3 trillion to the national deficit—effectively wiping out the modest savings Doge had touted. Musk was also said to be frustrated over being increasingly sidelined by the White House and the withdrawal of his preferred nominee to head NASA.
The timing of the Musk–Trump feud is especially delicate for Tesla, which is preparing to unveil its self-driving robotaxi in Austin next week. Musk has staked much of the company’s future on the success of the vehicle, positioning it as a cornerstone of Tesla’s long-term strategy.
However, its commercial rollout will require regulatory approval—now potentially complicated by the political fallout and heightened scrutiny surrounding Musk’s relationship with the federal government.
