In a reminder of what happens when billionaires and politics mix, Elon Musk’s clash with President Trump tanked Tesla’s stock value by $152 billion.
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Tesla stock plunged over 15%, wiping out more than $100 billion in market capitalization.
This severe decline was triggered by escalating tensions between Musk and Trump.
Investors reacted nervously after Trump’s threat to cancel government contracts with Musk’s companies.
The falling out emerged after critical remarks about Trump’s budget bill, described by Musk as a “disgusting abomination,” were made public.
Elon Musk took to social media to claim that without him, Trump would have lost the election.
These heated exchanges rattled investors, causing Tesla to suffer one of its worst single-day losses since going public.
Trump lambasted Musk’s response, denouncing him as “crazy” and highlighting their past working relationship.
“Look, Elon and I had a great relationship. I don’t know if we will anymore.” Trump remarked, expressing his surprise at the turn of events.
As the drama unfolds, Musk’s past contribution of nearly $300 million to Trump’s campaign highlights the complexity of their falling out.
Beyond the personal spat, significant concerns linger around regulatory ramifications for Tesla’s future developments, especially in autonomous vehicle technology.
“Investors fear that this Musk/Trump battle will…change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump Administration,” noted Wedbush analyst Dan Ives, cited by Forbes.
The consequences extended deeply into shareholder equity as Musk’s personal net worth declined by $26.7 billion, dropping to $388 billion.
Additionally, the stock slumped $47 per share, reaching its lowest point in weeks.
As investors continue to digest these developments, Tesla faces mounting challenges including declining sales in Europe and a tarnished brand reputation.
Elon Musk seems undeterred, live-tweeting during Trump’s televised comments, perhaps further aggravating the situation.
Meanwhile, Trump pointed to Musk’s upset triggered by the removal of EV credits from the bill.
Tesla stock, recently down 14% in a day, mirrors the broader malaise as it has slid 33% since Trump’s inauguration in January.
The ripples of Musk’s political engagement may prompt Republicans and conservatives to rethink collaborations with outspoken figures who clash with their policies.
With Tesla now under intensified scrutiny, stakeholders watch intently to see how Musk maneuvers through these tribulations.
Shares of Tesla fell 14% on Thursday as President Donald Trump threatened to pull government contracts for CEO Elon Musk’s companies, escalating a war of words over the spending bill.
The move dropped the EV maker $152 billion in value, the biggest hit to its market cap ever,… pic.twitter.com/b7DiuCNK8y
— CNBC (@CNBC) June 5, 2025
