Tesla’s stock took a brutal tumble on Thursday, dropping by a staggering 14% and wiping out around $150 billion in market value. The dramatic crash follows an explosive and very public fallout between Tesla CEO Elon Musk and U.S. President Donald Trump, drawing global attention—and investor panic.
The clash reportedly began over a Trump-backed federal spending bill but quickly escalated into a full-blown social media war. The tension deepened after reports emerged that the White House may cut lucrative federal contracts linked to Musk’s companies, including SpaceX, which has multi-billion-dollar deals with U.S. government agencies.
Musk responded in characteristically defiant fashion, tweeting: “Go ahead, make my day.”
Market analysts are deeply concerned. Dan Ives of Wedbush Securities described the situation as “jaw-dropping” and warned that the feud could damage Tesla’s standing with regulators and the broader market. “This must start to be calmed down,” he cautioned.
The dispute marks a stunning reversal for Musk, who previously held a close working relationship with Trump. Just last year, Musk’s alignment with the administration helped fuel Tesla’s stock rally. His appointment as head of the Department of Government Efficiency cemented that alliance—but it’s now unraveling fast.
Further complicating matters are Musk’s controversial political stances and public criticisms of spending cuts in Europe, where Tesla has also seen sales dip. There are growing fears among shareholders that Musk’s political entanglements are becoming a distraction from Tesla’s core business operations.
Just weeks ago, Tesla was forced to deny rumors of a leadership shakeup amid concerns that Musk was stretched too thin. His resignation from his government role at the end of May briefly stabilized the stock—but that gain has now been wiped out.
Adding fuel to the fire, Musk recently slammed the new Trump tariff policies and warned they could tip the U.S. into a recession. In response, Trump stripped electric vehicle tax credits—key incentives for Tesla buyers—and even pulled the nomination of Jared Isaacman, a known Musk ally, from heading NASA.
The once-strong Musk-Trump alliance has now turned toxic—and Tesla shareholders are paying the price. The stock closed Thursday at its lowest level since early May.
Investor Ross Gerber, a long-time Tesla supporter, captured the mood in a blunt social media post:
“Can someone please take the phone away from him? Tesla is getting destroyed.”
