Shares in Tesla took a steep fall on Thursday, sinking by 14% and slashing the company’s market value by an estimated $150 billion. The drop followed a public clash between Tesla CEO Elon Musk and U.S. President Donald Trump, which has shaken investor confidence and thrown the company’s political ties into chaos.
The tension reportedly began with Musk’s strong opposition to a Trump-supported federal spending bill. What started as policy disagreement quickly turned personal, as the two powerful figures exchanged insults on social media. Trump reacted strongly, warning that federal contracts held by Musk’s companies, especially SpaceX, could be in jeopardy.
“Go ahead, make my day,” Musk posted on his social media account, in response to the threat of losing key government deals. SpaceX currently benefits from federal contracts worth tens of billions of dollars, and any change to those agreements could have major financial consequences.
Dan Ives, a market analyst from Wedbush Securities, noted investor fears over the unfolding situation. He described the conflict as “jaw-dropping” and said it could hurt Tesla’s chances of benefiting from government support under Trump’s administration. “This must start to be calmed down,” Ives wrote in a statement.
Musk had previously played a key role in Trump’s government, serving as head of the Department of Government Efficiency. His position gave Tesla a strong relationship with the White House, which many investors believed was a reason for the company’s rising stock price last year.
However, the situation has taken a turn. Musk’s involvement in some controversial U.S. spending cuts, especially those that affected social programs in Europe, has led to public criticism and may have contributed to falling Tesla sales abroad.
Another concern for investors is whether Musk is too focused on politics and not enough on leading Tesla. Rumors had swirled last month about the company searching for a new CEO. Those rumors were denied, but they gained attention after Musk said he would reduce his government role. His resignation from his White House position in late May briefly lifted investor spirits and gave Tesla’s stock a temporary boost.
But Thursday’s events brought the gains to a halt. Musk’s pushback against the Trump administration’s new spending plan and his warnings about the economic risks of new tariffs were met with harsh responses. Trump also cancelled the NASA nomination of Jared Isaacman, a Musk ally, and accused Musk of being angry over the removal of electric vehicle tax credits—an incentive seen as vital to Tesla’s sales strategy.
The fallout has left investors deeply uneasy. Tesla’s stock closed at its lowest point in weeks. Ross Gerber, a longtime Tesla backer who recently reduced his holdings, posted a frustrated message online: “Can someone please take the phone away from him? Tesla is getting destroyed.”
