Elon Musk and Donald Trump's clash triggers Tesla stock to plunge 14%, wiping $152B in market cap—the biggest hit in company history.
Tesla shares fell 14% on Thursday after former President Donald Trump threatened to pull government contracts from Elon Musk’s companies.
This sharp decline wiped out $152 billion from Tesla’s value, pushing it below the $1 trillion benchmark and settling at $916 billion.
Musk responded on X (formerly Twitter), posting:
“Without me, Trump would have lost the election, the Democrats would control the House, and the Senate would be 51-49 Republican.”
Trump fired back, “I’m very disappointed in you.”
Escalating Rift Between Musk and Trump
The clash escalated after Musk, who had previously supported Trump, resigned from his special government advisor role and began openly criticizing him.
“Trump never showed me ‘The Big and Beautiful Bill’, it was passed overnight,” Musk claimed.
Tesla’s Biggest Single-Day Market Cap Hit
Tesla shares dropped 14% after Trump’s threat, intensifying their public spat.
This is the biggest single-day market cap hit Tesla has suffered, falling to $916 billion from over $1 trillion.
“Elon was acting erratic,” Trump posted on Truth Social.
“I pulled the EV mandate he wanted, and now he’s gone crazy!”
Despite weak sales numbers, Tesla shares had rallied 22% in May. However, they have now fallen nearly 18% this week.
The stock is down about 30% year-to-date, having peaked at $488.54 in December.
Musk’s Government Advisor Term Ends Amid Fallout
Musk’s special government advisor term ended Friday, sparking open clashes with Trump over tax cuts and budget bills.
“One thing about Elon is when he goes all in, he really goes all in,” said Walter Isaacson, Musk’s biographer, on CNBC’s Squawk Box.
“He is not measured in these matters and is visibly upset.”
Trump’s Comments Fuel the Conflict
Speaking from the Oval Office, Trump said Musk was angry that the new bill excluded EV credits.
“Elon and I had a good relationship. I don’t know if we still do,” Trump remarked.
Musk countered:
“Without me, Trump would have lost the election.”
Musk, the world’s richest man, has recently threatened to back primary challengers against lawmakers who supported the bill, calling it “disgusting hatred.”
- He has banned the entry of citizens from 12 high-risk countries into America.”
Signs of De-escalation Between Trump and Musk
Later Thursday night, the tone between Trump and Musk appeared to soften after a heated exchange on social media.
Reports suggested that a brief phone call took place between the two.
“Oh, it’s okay,” Trump said during the call. “We’re doing exceptionally well; it’s been never better.”
White House Press Secretary Karoline Leavitt told Fox News’ Hannity that Trump continued to prioritize passing “a big, beautiful bill,” that Musk very publicly criticized.
Leavitt said, “Last Friday, the President had Elon Musk in the Oval Office and thanked him for leading government waste, fraud, and abuse.”
Musk Withdraws Threat Against NASA’s Dragon Spacecraft
Meanwhile, Musk seemed to backtrack on his earlier threat to cancel SpaceX’s critical Dragon spacecraft operations for NASA.
When a user on X advised both Musk and Trump to “take a step back for a few days,” Musk replied:
“Good advice. Okay, we won’t cancel Dragon.”
Trump-Musk Fallout
- Tensions flared between U.S. President Donald Trump and tech billionaire Elon Musk, with both trading public insults on social media.
- Trump expressed “surprise” and “disappointment” at Musk’s criticism of his tax and spending bill.
- Musk responded with a series of posts suggesting Trump should be impeached.
- Trump retaliated by threatening to reduce government contracts with Musk’s companies.
- Tesla’s stock was heavily impacted, plunging more than 14% in U.S. trading.
- Later, Musk appeared to soften his stance, pulling back his threat to cancel SpaceX’s NASA operations.