A public fallout between Tesla CEO, Elon Musk, and U.S. President, Donald Trump, has triggered a sharp sell-off in Tesla shares, wiping out approximately $150 billion in market value.
The electric vehicle maker’s stock plunged by 14 per cent on Thursday, following a series of escalating personal and political clashes between the two once-close allies. The row, initially sparked by disagreements over a Trump-backed spending bill, quickly devolved into a social media war of words.
In retaliation, President Trump threatened to cancel lucrative government contracts with Musk-owned companies, including SpaceX, which currently holds federal deals worth tens of billions of dollars. Musk fired back defiantly on X (formerly Twitter), stating: “Go ahead, make my day.”
Market watchers expressed alarm over the dispute. Dan Ives, a senior analyst at Wedbush Securities, described the situation as “jaw-dropping,” warning that continued hostilities could erode investor confidence and damage Tesla’s regulatory standing.
“This must start to be calmed down,” Ives urged, citing fears that Tesla’s strong market performance last year—fueled partly by Musk’s close ties to the Trump administration—could unravel.
Musk, who was previously appointed as head of the Department of Government Efficiency, had been a key Trump ally. But the partnership has since soured, with Musk’s involvement in contentious policy moves, especially in Europe, drawing criticism and hurting Tesla’s international image.
Investor concerns have also grown over Musk’s political entanglements. Rumours swirled last month about a possible leadership shake-up at Tesla, forcing the company to publicly deny any plans to replace Musk. His resignation from the government role in late May provided brief relief to markets before tensions flared again this week.
The latest blow came after Musk’s criticism of new Trump tariffs, which he warned could tip the U.S. into a recession. In response, Trump accused Musk of reacting bitterly to the removal of electric vehicle tax credits, a move that impacts Tesla buyers directly. The president also withdrew the nomination of Musk ally Jared Isaacman to head NASA.
Thursday’s stock rout erased gains Tesla had made since Musk pledged renewed focus on the company. Tesla closed at its lowest point since early May.
Longtime investor Ross Gerber captured the mood on social media, posting: “Can someone please take the phone away from him? Tesla is getting destroyed.”
