- Politics
- Trump-Musk Spat Rattles Investors
- By Manohar Patil
Tesla Shares Plummet as Trump-Musk Spat Rattles Investors
The escalating public feud between two of the world’s most influential figures, Donald Trump and Elon Musk, has sent shockwaves through the financial markets, with Tesla stock bearing the brunt of the fallout. What began as a seemingly amicable, if politically expedient, alliance has rapidly devolved into a bitter online and verbal exchange, leaving investors unnerved and wiping billions from Tesla’s market capitalization.
A Bromance Turns Sour
For a period, the relationship between Donald Trump and Elon Musk appeared to be flourishing. Musk, a self-proclaimed “free speech absolutist,” had publicly endorsed Trump, even campaigning alongside him and contributing significantly to his political efforts. Following Trump’s election, Musk took on a role as co-lead of the Department of Government Efficiency (DOGE) within the administration, signaling a potentially beneficial alignment for his various ventures, including Tesla and SpaceX.
However, this perceived bromance abruptly ended. The catalyst for the recent dramatic escalation appears to be Musk’s vocal criticism of Trump’s “Big, Beautiful Bill,” a comprehensive tax and spending package. Musk publicly denounced the bill as a “disgusting abomination” that would exacerbate the national debt, a stark departure from his previous supportive stance. This criticism seemingly ignited Trump’s ire, leading to a tit-for-tat on social media that quickly spiraled out of control.
The Impact on Tesla Stock
The immediate aftermath of this very public spat was a significant plunge in Tesla’s share price. On Thursday, June 5, 2025, Tesla stock plummeted by more than 14%, resulting in a staggering loss of approximately $150 billion in market value within hours. This marked one of the worst single-day performances for the electric vehicle giant in months and contributed to a year-to-date decline for the stock.
Investors grew increasingly concerned as the rhetoric escalated. Trump, known for leveraging government power against perceived adversaries, openly threatened to cut off federal contracts and subsidies to Musk’s companies, including the lucrative agreements held by SpaceX. While Tesla receives fewer direct federal grants than SpaceX, it still benefits from various state and federal programs, including tax incentives for electric vehicles. The mere suggestion of such punitive actions sent shivers down the spines of Tesla shareholders, who fear a potentially hostile regulatory environment under a Trump administration.
Investor Anxiety and Future Outlook
The market’s reaction underscores the vulnerability of companies like Tesla, whose fortunes can be heavily influenced by political whims and the public perception of their leadership. While some analysts maintain a long-term bullish outlook on Tesla’s technological advancements, particularly in areas like autonomous driving, the current political turbulence introduces a significant layer of uncertainty.
The feud has highlighted how deeply entangled corporate leadership, especially that of a high-profile figure like Elon Musk, can become with political conflicts. For investors, the immediate future for Tesla shares is likely to remain volatile. While there was a slight rebound on Friday as the intensity of the spat appeared to cool, the underlying tension and the potential for renewed conflict loom large. The question remains whether cooler heads will ultimately prevail, or if the personal animosity between these two powerful individuals will continue to exert downward pressure on one of the world’s most valuable companies.
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