Tesla’s stock sank nearly 15 percent Thursday as the friendship between Elon Musk and President Trump explodes and results in threats and a war of words.
The fallout began earlier this week when Musk publicly slammed the GOP’s new tax-and-spending bill, calling it a “disgusting abomination.” The legislation has drawn criticism for potentially affecting clean energy incentives such as the $7,500 electric vehicle tax credit, an incentive that has helped fuel Tesla’s growth.
By Wednesday, Musk had intensified his opposition, urging his millions of followers on X to pressure lawmakers. “Call your Senator, Call your Congressman,” he posted. “Bankrupting America is NOT ok! KILL the BILL.”
“I’m very disappointed, because Elon knew the inner workings of this bill better than almost anybody sitting here, better than you people,” Trump told reporters in the Oval Office on Thursday. “All of a sudden, he had a problem, and he only developed the problem when he found out that we’re going to have to cut the EV mandate.”
The administration is reportedly weighing whether to revoke EV subsidies entirely and is considering canceling federal contracts with Musk-led companies, including Tesla and SpaceX, moves that could dramatically affect Musk’s business empire.
That led Musk to claim he was the reason Trump won in 2024 and sparked a war of the words that ended with Tesla stock tanking by closing bell. It finished down nearly 15 percent and now sits at 284.70 a share.
The stock plunge wiped out an estimated $152 billion from Tesla’s market capitalization, its largest daily drop in years, according to WIRED.
Trump’s companies also suffered financial blowback, with shares in Trump Media & Technology Group down eight percent and Trump Coin, the president’s meme cryptocurrency, down 12 percent in afternoon trading, per The Wall Street Journal.
Musk, who left his position in the Trump administration just last week, had previously led the Department of Government Efficiency that sought to cut money from the federal budget. However, the plan has faced mounting criticism for failing to deliver the deep spending cuts it promised.
Musk’s prior relationship with Trump had been widely viewed as advantageous to his businesses, given SpaceX’s close ties with NASA and the potential for regulatory support on Tesla’s autonomous vehicle programs, including its upcoming robotaxi testing.
But that was eroded when Trump responded to Musk and threatened not only the EV subsidy but also Musk’s other government contracts.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump wrote in one of many posts on Thursday on Truth Social.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump wrote in one of many posts on Thursday on Truth Social.
Musk, the owner of X, previously known as Twitter, responded on his platform with a string of tweets aimed at Trump, including the drop of “a really big bomb.”
“@realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!” Musk wrote.
“Mark this post for the future. The truth will come out,” he added.
Though Musk and Trump had frequently praised each other during Musk’s brief four-month stint in the government, insiders told The Wall Street Journal that their relationship behind the scenes was often rocky, marked by disagreements over issues such as the Middle East and cabinet meeting attendance.
Sources claimed even Trump had recently begun to doubt Musk’s promises to cut $1 trillion in government spending, questioning the sincerity of those claims.
