Tesla’s stock plunged 14% on Thursday, wiping out roughly $150 billion in market value, after a public feud between CEO Elon Musk and U.S. President Donald Trump escalated dramatically, according to a report by the BBC.
The market downturn followed growing investor anxiety over the fallout from the deteriorating relationship between Musk and the White House—a relationship once seen as mutually beneficial.
The clash began over a Trump-backed spending bill but quickly spiraled into personal attacks exchanged across social media. Trump retaliated by threatening to cancel federal contracts with Musk’s companies, including SpaceX, which holds deals worth tens of billions of dollars. Musk fired back defiantly, writing, “Go ahead, make my day.”
Dan Ives, a tech analyst at Wedbush Securities, called the situation “jaw-dropping,” warning that the conflict could derail Tesla’s prospects for favourable regulatory treatment. “This must start to be calmed down,” he urged.
Musk had previously been considered a close Trump ally, even accepting a formal role in the administration as head of the Department of Government Efficiency. That alliance played a significant role in Tesla’s stock rally last year but has since become both politically and commercially risky.
Controversy surrounding Musk’s support for government spending cuts—especially in Europe—has also sparked backlash and reportedly hurt Tesla’s sales overseas. Meanwhile, investor concerns have grown over Musk’s political ambitions, with some fearing he’s no longer fully focused on Tesla’s core operations.
Last month, speculation about leadership changes at Tesla intensified after Musk announced he would scale back his government role. His resignation at the end of May briefly buoyed the stock before this week’s dramatic reversal.
Thursday’s selloff followed Musk’s criticism of the new Trump spending plan and opposition to fresh tariffs, which he warned could trigger a recession. In response, Trump accused Musk of being upset over the end of electric vehicle tax credits and withdrew the nomination of Musk ally Jared Isaacman to lead NASA.
The fallout marks a stunning collapse in what was once a high-profile partnership. Tesla’s stock closed at its lowest level since early May, erasing gains made following Musk’s pledge to refocus on company leadership.
Ross Gerber, a longtime Tesla supporter who recently reduced his stake, voiced investor frustration online: “Can someone please take the phone away from him? Tesla is getting destroyed.”
