Tesla has suffered a record-breaking $152 billion loss in market value after a heated feud between CEO Elon Musk and President Donald Trump escalated. The electric car company’s stock dropped 14.3%, marking its biggest single-day decline in history and pushing Tesla out of the $1 trillion market capitalization club.
The dispute began when Musk publicly criticized Trump’s “Big Beautiful Bill”, a government spending plan that Musk claims will increase the national debt and harm the economy. Musk tweeted, “Congress is spending America into bankruptcy!” in response to the bill, according to Yahoo Finance.
Trump fired back on his Truth Social account, saying, “I don’t mind Elon turning against me, but he should have done so months ago. This is one of the Greatest Bills ever presented to Congress”. The president defended the bill, arguing that it would put the country “on a path of greatness”, as reported by BBC.
The feud quickly escalated, with Musk accusing Trump of lying about electric vehicle mandates and suggesting that Tesla’s Dragon spacecraft could be decommissioned in response to Trump’s threats to cut government subsidies. The growing tension raised concerns about Tesla’s long-standing relationship with the U.S. government, including its reliance on federal incentives for its electric vehicle business.
Market reaction
Investors reacted negatively to the public clash, fearing that Tesla could face government contract cancellations and regulatory challenges. The stock price plunged to $284.70, wiping out billions in shareholder value, according to CNBC.
Analysts at Wedbush Securities called the situation “jaw-dropping”, warning that the feud could impact Tesla’s future growth and its relationship with policymakers. The dip comes at a challenging time for Tesla, as the company battles declining EV sales, supply chain disruptions, and increasing competition in the electric vehicle market.
What’s next?
Musk has hinted at forming a new political party, claiming that “80% of Americans are stuck in the middle” between Democrats and Republicans. A poll on his social media account showed 82% support for the idea, as noted by Yahoo Finance.
Meanwhile, Trump has suggested terminating government subsidies for Musk’s companies, including SpaceX, which recently completed a mission to bring stranded astronauts home from the International Space Station, according to BBC.
With tensions rising, investors and political analysts are closely watching how this feud will impact Tesla’s future, government contracts, and the broader stock market. Some experts believe that Musk’s influence over financial markets could push him further into political decision-making, while others worry that Tesla’s stock could suffer even greater losses in the coming weeks.
The clash between Musk and Trump highlights the delicate balance between corporate interests and government policy, with billions at stake. Will Musk and Trump find common ground, or will this battle continue to shake Wall Street? Only time will tell.
