Tesla Inc. suffered a massive blow on Thursday as its shares plunged more than 14%, triggered by a public fallout between CEO Elon Musk and former U.S. President Donald Trump. The sharp decline erased approximately $150 billion from the electric vehicle giant’s market capitalisation, sending shockwaves across the tech and investment community.
The selloff came after Musk openly criticized a Republican-supported tax bill, calling it a "disgusting abomination", and suggested that his support had partly contributed to Trump’s political success. Musk, who previously headed the federal Department of Government Efficiency (DOGE), also announced his resignation from the role shortly after airing his grievances.
Trump Threatens Retaliation
In a swift response, Trump reportedly threatened to revoke federal subsidies and government contracts that benefit Musk’s companies, particularly Tesla and SpaceX. The escalating spat has unsettled investors, raising concerns over potential regulatory and financial backlash from a future Trump administration.
By market close, Tesla’s stock fell to $284.70, dragging its market valuation below the $900 billion mark. The broader Nasdaq Index also took a hit, slipping 0.8%, reflecting wider investor anxiety within the tech sector.
Investor Jitters Over Tesla’s U.S. Prospects
The Musk–Trump clash has cast a shadow over Tesla’s robotaxi initiative, a highly anticipated autonomous transportation service set to debut in Austin, Texas, later this year. The service is expected to expand into additional U.S. cities by 2026, but investors now fear that political tensions could stall federal support or regulatory clearance.
Adding to the company’s challenges, recent reports suggest a slowdown in Tesla’s European sales, while the automaker is once again facing scrutiny over its Autopilot system following renewed attention on a 2023 fatal crash allegedly linked to the self-driving software.
Musk’s Net Worth Takes a Hit
The market drop also dealt a significant blow to Elon Musk’s personal fortune, slashing nearly $27 billion from his net worth. Despite the loss, Musk retains his title as the world’s richest individual, largely buoyed by his holdings in Tesla, SpaceX, and other ventures.
As of the time of reporting, Tesla has not released an official statement addressing the market reaction or the ongoing political row.
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