Tesla shares plummeted 14% on Thursday, wiping $152 billion off the electric vehicle giant’s market capitalization—its steepest single-day loss ever. The decline came amid a growing public feud between CEO Elon Musk and President Donald Trump over a controversial government spending bill.
The dispute escalated after Trump threatened to cancel federal contracts with Musk’s companies, accusing him of erratic behavior and calling the EV mandates “a mistake.” “Elon went crazy,” Trump posted on Truth Social, blaming Musk for lobbying against the bill, which removed key electric vehicle credits.
Tesla’s market value fell below the $1 trillion threshold, closing at $916 billion, as investors reacted to the political chaos and the prospect of lost government support. Shares, which had rallied 22% in May despite soft sales, are now down nearly 18% this week and nearly 30% for the year.
Musk fired back on X, claiming credit for Trump’s 2024 election victory and accusing the administration of betrayal. He called the spending bill “a disgusting abomination” and vowed to back primary challenges against its Republican supporters.
The fallout comes just days after Musk concluded his role in Trump’s Department of Government Efficiency (DOGE). Biographer Walter Isaacson told CNBC that Musk is “seriously upset” and not known for moderating his response when provoked.
Tesla also faces mounting operational challenges, including falling EV sales in Europe and declining brand favorability. The company is under pressure to launch a delayed driverless ride-hailing service in Austin, Texas, where competitor Waymo has already partnered with Uber.
Further complicating matters, Musk is reportedly furious over the Trump administration’s decision to withdraw Jared Isaacman’s nomination to lead NASA. Isaacman, a key Musk ally, has led two SpaceX missions and invested heavily in the company through his firm Shift4.
As Musk doubles down on his opposition to Trump’s agenda, Tesla’s political and financial future remains increasingly uncertain.
