Tesla’s stock took a sharp nosedive on Thursday, plunging 14% and wiping out roughly $150 billion in market value, as a dramatic public feud erupted between CEO Elon Musk and U.S. President Donald Trump. The fallout marks one of Tesla’s worst trading days in months and has raised serious investor concerns over the company’s political entanglements.
The rift, which began over Musk’s vocal opposition to a Trump-backed spending bill and recent tariff policies, quickly devolved into personal insults exchanged on social media. Trump retaliated with a threat to sever government contracts with Musk’s companies, including SpaceX, which holds lucrative agreements with NASA and the U.S. Department of Defense.
“Go ahead, make my day,” Musk fired back, intensifying the standoff and rattling markets already jittery about political risks.
Longtime Tesla bull Dan Ives of Wedbush Securities called the feud “jaw dropping” and warned it could undermine expectations of regulatory support for Tesla’s self-driving and robotics ventures under a potential second Trump administration. “This must start to be calmed down,” Ives said, noting that the clash casts doubt on the business environment Tesla was counting on.
The controversy comes at a sensitive time for Musk, who recently stepped down from his role advising on digital policy and had assured investors of renewed focus on Tesla’s operations. Yet, mounting political distractions and Musk’s divisive public statements have continued to stoke investor unease.
Tesla’s stock, which soared last year amid optimism about Musk’s alliance with Trump, has struggled in 2025. European backlash over Musk’s perceived role in government budget cuts and the loss of key EV tax incentives in the U.S. have dampened sentiment and sales. Investor Ross Gerber, a former Tesla advocate, summed up the mood on social media: “Can someone please take the phone away from him. Tesla is getting destroyed.”
With Tesla shares down 25% year-to-date but still up 60% over the past 12 months, analysts say the company’s future could hinge on Musk’s ability to de-escalate the political drama and return focus to innovation and execution.
