Published: June 6, 2025, 06:04 PM
Tesla Inc. faced a dramatic 14% drop in its share price on Thursday, erasing over $150 billion in market value and marking its biggest single-day loss ever. The company’s market capitalization fell below the $1 trillion threshold, closing at $916 billion.
The plunge follows a public dispute between Tesla CEO Elon Musk and former U.S. President Donald Trump, igniting investor concerns about the company’s political entanglements and future government support.
The row began when Trump, responding to Musk’s sharp criticism of the new federal spending bill, threatened to cancel government contracts involving Musk’s businesses. In a post on Truth Social, Trump wrote, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate… and he just went CRAZY!”
Speaking from the Oval Office earlier that day, Trump remarked, “Elon and I had a great relationship. I don’t know if we will anymore. I was surprised.” He suggested Musk’s frustration stemmed from the exclusion of electric vehicle (EV) credits in the new legislation.
Musk replied tersely on X (formerly Twitter), simply writing “Whatever,” during Trump’s press briefing. He later added, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51–49 in the Senate.”
Musk’s political rhetoric has intensified recently. He called the spending bill a “disgusting abomination” and urged voters to challenge lawmakers who support it. This marks a stark shift from his earlier collaboration with the Trump administration, where he briefly led the Department of Government Efficiency (DOGE), a role that ended last Friday.
Despite a 22% rally in May, Tesla shares have been under pressure since the Musk–Trump clash surfaced. The stock has declined nearly 18% this week alone and is now down nearly 30% year-to-date from its December 18 high of $488.54.
Investors are watching closely as the fallout from the feud continues, with questions emerging about Tesla’s political exposure and leadership direction in a highly volatile market.
