Tesla's share price dropped by around 14.2% on Thursday at market close, wiping out approximately $152 billion from the company's value as the feud between Elon Musk and Donald Trump erupted into the public eye.
Tesla share price witnessed a sharp 14.2% decline in its share price at Thursday’s market close, erasing around $152 billion from the company’s valuation. The dramatic fall followed an intensifying and public exchange of insults and threats between Tesla CEO Elon Musk and former US President Donald Trump. This downturn pushed Tesla’s total market capitalisation down to nearly $900 billion.
The market drop significantly impacted Elon Musk’s personal wealth. According to the Bloomberg Billionaires Index, the plunge in Tesla stock slashed $8.73 billion from his net worth in a single day. The financial hit comes amid rising tensions between Musk and Trump, once seen as political allies.
The spat unfolded across social media platforms, with Trump posting on Truth Social that he could slash federal subsidies and government contracts granted to Musk’s ventures, including Tesla and SpaceX. In retaliation, Musk criticised Trump’s economic policies, called for his impeachment, and accused him of connections to controversial figures.
At one point, Musk threatened to decommission the SpaceX spacecraft used by NASA for vital missions, a statement he later walked back. The feud appears to stem from Musk’s opposition to a new tax bill introduced by the Trump administration, which eliminates electric vehicle tax credits and contributes an estimated $2.3tn to the national deficit.
Tesla has already been under pressure in 2025, with declining global sales and growing resistance from consumers due to Musk’s increasing alignment with far-right political ideologies. The latest political controversy has only intensified investor concerns. As traders responded to the conflict, short sellers of Tesla stock reportedly made substantial gains, according to a report by the Wall Street Journal.
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Tesla and SpaceX have been significant recipients of US government contracts, with Musk previously heading a department tasked with cost reduction across federal agencies. The escalating feud has raised investor anxiety about potential backlash, including revoked contracts or heightened regulatory scrutiny that could affect Musk’s wider business operations.
The dispute also coincides with a critical phase for Tesla as it prepares to unveil its self-driving robotaxi in Austin next week. The product represents a major strategic shift for the company, but its success depends heavily on approval from government regulators, placing it in a potentially vulnerable position amid the political rift.
Tesla’s $152 billion market value wipe-out and the resulting $8.73 billion personal loss for Elon Musk illustrate the financial risks that can arise when high-profile corporate leaders become entangled in political disputes. The ongoing feud between Musk and Trump, once close allies, casts uncertainty over Tesla’s future trajectory, especially as regulatory approval becomes vital for its upcoming innovations.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jun 6, 2025, 10:24 AM IST
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