Tesla shares plunged more than 14% on Thursday, erasing $152 billion in market value, after a heated public spat erupted between CEO Elon Musk and President Donald Trump over a federal budget bill The sell-off marked the single largest one-day drop for Tesla stock in years.
The feud began when Musk criticized Trump’s latest legislative proposal, labeling it an “abomination” and arguing it would worsen the federal deficit Trump fired back, threatening to cut off government contracts and subsidies for Musk’s companies, including Tesla and SpaceX. “The easiest way to save money in our budget, billions and billions of dollars, is to terminate Elon’s governmental subsidies and contracts,” Trump wrote on Truth Social.
Investors, who had previously bet on a strong relationship between Musk and Trump, rushed to dump Tesla shares, fearing that the fallout could jeopardize future federal support for autonomous vehicle initiatives—a key driver of Tesla’s growth plans The stock briefly rebounded Friday, but remained sharply down for the week.
Musk’s net worth dropped by $34 billion in a single day as a result of the market turmoil, while Tesla shares have now lost more than 25% year-to-date Analysts warn that the ongoing feud could delay regulatory approvals for Tesla’s upcoming robotaxi service, which the company plans to launch in Austin, Texas, this month.
Despite the drama, some experts suggest the conflict may be short-lived. “Musk needs Trump and Trump needs Musk for many reasons,” noted Wedbush analyst Dan Ives, who remains bullish on Tesla’s long-term prospects The public exchange was so intense that it briefly overshadowed other White House priorities, drawing global attention to the personal and political stakes for both men.
