Tesla shares plummet 14% amid Elon Musk-Donald Trump feud, $153 billion lost. What's next?
US President Donald Trump's public feud with Elon Musk has started to affect Wall Street, especially EV giant Tesla, with the company's shares plummeting 14 per cent on Thursday.
This comes as Elon Musk and Donald Trump criticised each other on social media. The Tesla and SpaceX CEO said the US President would have lost last year's election without him, and the Republican leader threatened to tear off federal contracts with the world's richest person.
The 14 per cent fall in shares knocked $153 billion off Tesla's market valuation, according to Bloomberg.
Tesla investors have soured on Musk's relationship with Trump after initially welcoming it right after the November 2024 election. The shares tanked earlier this year as Musk's association with DOGE damaged the car company's brand. The shareholders were tormented for months by Elon Musk's role in the Trump administration. Shares started to rally when he promised in April to focus more on Tesla.
But any relief brought by his formal government exit last week quickly turned to fear as the electric-vehicle maker's chief executive traded barbs with his former boss.
A rift has emerged between the two over Trump's proposed tax legislation. While Musk has been critical of the 'Big Beautiful Bill Act' since before his exit from the government, Trump did not react to it till Thursday.
The criticism exploded into an all-out public feud with the Republican threatening to end government contracts and subsidies for Tesla and SpaceX. The rout shed $153 billion from Tesla's market value, the biggest one-day drop on record, while yielding short sellers $4 billion in gains, according to data from S3 Partners.
Tesla shareholders have seen many stomach-churning swings in the past few months, ever since Elon Musk publicly backed Donald Trump's election campaign last year.
Thursday's slump showcased just how pronounced Musk's influence over his company's stock is. And while the rout may eventually present a buying opportunity, some market watchers say it's too risky to try to catch a falling knife.
Shares of Tesla surged following Trump's election victory, which many expected would be a boon for the company, given Musk's proximity to the then-president-elect.
However, the outlook for Tesla's EV business has been weakening. Musk's involvement in political controversies both in the US and abroad has repelled some car buyers and spurred protests against the company. The stock is down 41 per cent from its all-time high in December.
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