Musk-Trump feud wipes out $150bn from Tesla’s market value
A public dispute between Tesla's CEO, Elon Musk, and U.S. President Donald Trump has led to a significant drop in Tesla shares, resulting in a loss of approximately $150 billion in market capitalization.
The electric vehicle company’s stock fell by 14 percent on Thursday due to a series of escalating personal and political conflicts between the two former allies. The altercation, which began over a Trump-supported spending bill, quickly escalated into a social media confrontation.
In response, President Trump threatened to cancel lucrative federal contracts with Musk's companies, including SpaceX, which currently holds government deals valued in the tens of billions. Musk defiantly responded on X (formerly Twitter), saying: “Go ahead, make my day.”
Market observers voiced concerns over the conflict. Dan Ives, a senior analyst at Wedbush Securities, referred to the situation as “jaw-dropping,” cautioning that ongoing tensions could undermine investor trust and harm Tesla's regulatory position.
“This needs to be de-escalated now,” Ives insisted, highlighting fears that Tesla's robust market performance last year—partly driven by Musk’s close relationships with the Trump administration—might unravel.
Musk, who was once appointed to lead the Department of Government Efficiency, was a significant ally of Trump. However, the relationship has since deteriorated, with Musk's participation in controversial policy decisions, particularly in Europe, attracting criticism and damaging Tesla’s reputation abroad.
Investor worries have also intensified regarding Musk’s political involvements. Rumors about a potential leadership change at Tesla circulated last month, prompting the company to publicly deny any plans to replace Musk. His resignation from the governmental position in late May provided the markets with temporary relief before tensions escalated again this week.
The latest setback occurred after Musk criticized new tariffs introduced by Trump, warning they could lead the U.S. into a recession. In retaliation, Trump suggested Musk was reacting resentfully to the removal of electric vehicle tax credits, which directly affect Tesla buyers. Additionally, the president rescinded the nomination of Musk ally Jared Isaacman to lead NASA.
Thursday’s stock decline erased the gains Tesla had achieved since Musk announced a renewed commitment to the company. Tesla's stock closed at its lowest level since early May.
Veteran investor Ross Gerber expressed the prevailing sentiment on social media, posting: “Can someone please take the phone away from him? Tesla is getting destroyed.”
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