Tesla’s stock has plummeted 16% since CEO Elon Musk criticized President Donald Trump’s significant spending bill, reflecting a 33% overall decrease since Inauguration Day. This decline followed Musk’s resignation from his role in Trump’s administration, where he led a project aimed at government efficiency to focus more on his businesses, including Tesla and SpaceX. His departure coincided with their deteriorating relationship, marked by escalating public insults.
Tensions intensified when Musk publicly labeled the spending bill a “disgusting abomination,” expressing frustration that it lacked an electric-vehicle tax credit he had lobbied for, crucial for incentivizing Tesla purchases. Trump retaliated by threatening to cut “Elon’s Governmental Subsidies and Contracts” on his Truth Social platform. The conflict escalated further during a meeting with German Chancellor Friedrich Merz, where Trump claimed Musk had previously supported the bill but changed his stance once it was revealed that the EV mandate would be cut.
Musk countered, asserting he had not been adequately informed about the bill. Analysts suggest that the broader implications of Musk and Trump’s feud might negatively impact Tesla’s stock more than the absence of the tax credit itself. Analysts like Dan Ives noted investors are worried about potential regulatory challenges stemming from Trump’s reaction.
Despite the turbulence, Musk retains his position as the world’s richest individual, with a net worth of $368 billion. Meanwhile, Trump’s media company, which oversees his Truth Social platform, has also faced market difficulties, reflecting a challenging period for both figures.
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