Elon Musk and Donald Trump's Public Feud Wipes Billions Off Tesla's Market Cap

The Billion-Dollar Fallout: How the Elon Musk-Donald Trump Feud Tanked Tesla's Value

In a dramatic turn of events that underscored the volatile intersection of technology, politics, and finance, a public feud between Tesla and SpaceX CEO Elon Musk and former President Donald Trump sent shockwaves through the market. What began as a disagreement over proposed legislation quickly devolved into a bitter online battle, resulting in a staggering loss of $152 billion from Tesla's market capitalization and a significant dip in the value of Trump's associated cryptocurrency, TrumpCoin. This high-profile clash highlights the immense influence wielded by these figures and the tangible economic consequences of their public disputes.

The animosity, which had been simmering for weeks, boiled over on a recent Thursday. Musk initiated the latest salvo on X, the social media platform he owns, launching a scathing critique of Trump's proposed "One Big Beautiful Bill." Musk specifically targeted provisions within the bill that he argued were detrimental, including restrictions on immigration and limitations on green energy subsidies. He also estimated the bill would add a substantial $2.4 trillion to the US deficit, a point of significant contention.

Trump, not one to back down from a public confrontation, retaliated swiftly on Truth Social, his own social media platform. He accused Musk of opposing the bill solely out of self-interest, claiming Musk was motivated by the potential loss of electric vehicle tax credits that benefit Tesla. The exchange rapidly escalated, with Musk posting dozens of responses, including a provocative claim that Trump is mentioned in the Epstein Files, suggesting this is the reason for their continued secrecy.

President Donald Trump, accompanied by Tesla and SpaceX CEO Elon Musk, walks past a Tesla Model S on the South Lawn of the White House on March 11, 2025. Photograph: Andrew Harnik/Getty Images

Immediate Market Repercussions

The market reaction was swift and brutal. Tesla's stock plummeted by approximately 14 percent in a single day, marking one of the most significant single-day declines in its market cap in years. This downturn wiped out $152 billion in value. Simultaneously, TrumpCoin saw its value drop by nearly 10 percent, illustrating that the financial impact extended beyond Musk's primary enterprise.

This public spat represents a high-stakes divorce for both figures and their respective ventures. Trump issued threats to terminate Musk's governmental subsidies and contracts, which are crucial revenue streams for companies like Tesla and SpaceX. These contracts, particularly those with NASA for SpaceX's Dragon spacecraft used for transporting cargo and astronauts to the International Space Station, represent billions of dollars. Musk responded with a counter-threat, posting that he would decommission the Dragon spacecraft "immediately" if Trump followed through.

The intensity of the political backlash was further amplified by Trump allies. Steve Bannon, a prominent figure in Trump's circle and a vocal critic of Musk, reportedly advised the former president to cancel all of Musk's contracts and initiate multiple investigations. Bannon went further, suggesting a formal investigation into Musk's immigration status, claiming a "strong belief that he is an illegal alien" and should be deported. Reports have previously surfaced questioning whether Musk may have provided false information on his visa forms in the 1990s, which could have potentially rendered his presence and work in the US illegal at the time. This adds a deeply personal and potentially legally significant dimension to the political feud.

Tesla's Delicate Juncture

The timing of this market hit is particularly sensitive for Tesla. The electric vehicle giant is navigating a challenging period, marked by recent underperformance and high-stakes upcoming initiatives. The company's latest quarterly results, reported in April, were its weakest in years, showing declines in production, deliveries, and sales, with a notable slump in the European market. Furthermore, Tesla has reportedly scaled back ambitions for a more affordable electric vehicle, abandoning plans to utilize advanced manufacturing techniques for that specific project.

Amidst these challenges, Tesla is preparing for the highly anticipated debut of its robotaxi service in Austin, Texas. This service has been long-awaited and, like many of Musk's ambitious projects, has faced significant delays. Musk has increasingly framed Tesla not merely as an automaker but as a robotics and autonomous vehicle technology company, placing the success of its self-driving technology and humanoid robot endeavors at the core of its valuation. Bloomberg previously reported that the company had internally targeted the following week for the robotaxi launch, adding pressure to the current market volatility. Musk has also repeatedly claimed that his AI company, xAI, is on the verge of releasing a new model, another promised innovation that has seen delays.

In an attempt to reassure investors concerned about the company's direction and his divided attention, Musk recently announced he would step down from his so-called Department of Government Efficiency (DOGE) post and return to focusing on his core companies, including Tesla, mostly full-time. This move was seen as an effort to regain investor confidence, which has been tested by production issues, missed targets, and Musk's numerous other ventures and public controversies.

The Subsidy Debate and Political Motivations

Musk publicly denied that his sudden shift in stance towards Trump was motivated by concerns over electric vehicle subsidies. He has consistently maintained that Tesla does not require federal tax credits, which can amount to $7,500 per vehicle, to sell its cars. However, in one of his X posts during the feud, Musk revealed a clear frustration with the proposed bill's approach to energy subsidies.

He wrote, "Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill." This statement suggests that while he may claim Tesla doesn't *need* the subsidies, he views their potential removal, especially while fossil fuel subsidies remain untouched, as fundamentally unfair and a key reason for his opposition to the bill's structure.

The political motivations behind the feud are complex. Musk has previously engaged with Trump and his administration, even serving on advisory councils early in Trump's presidency before stepping down. Their relationship has been described as a "bromance" that has since soured. Musk's shift from a perceived ally to a vocal critic, particularly on a bill touching on key Republican priorities like immigration and energy, represents a significant political realignment, or perhaps simply a public airing of long-standing disagreements.

Trump's reaction, focusing on the EV subsidies and threatening government action, aligns with his past behavior towards perceived corporate adversaries. The involvement of figures like Steve Bannon and the severity of the threats, including calls for investigations and deportation, underscore the potential real-world consequences for Musk and his businesses beyond just market fluctuations.

The Rise of the 'Tesla Takedown' Movement

Adding another layer to the pressure on Tesla is the growing grassroots movement known as the "Tesla Takedown." For months, thousands of protesters have gathered outside Tesla showrooms and service centers globally, demonstrating against Musk's and Trump's politics. The protests encompass a range of grievances, from their stances on climate change to the actions associated with Musk's DOGE initiative.

What began as disparate local actions has coalesced into a more organized movement with a central identity. On the day the Musk-Trump feud reached its peak, the organizers of the Tesla Takedown issued a concise, impactful statement: "Sell, Sell, Sell." This direct call to action from a movement explicitly opposing Musk's political alignment and business practices adds another factor influencing investor sentiment and public perception of Tesla.

Broader Implications for Tech, Politics, and Markets

The public clash between two of the world's most prominent and controversial figures, each controlling significant platforms (X and Truth Social) and major corporations (Tesla, SpaceX), has far-reaching implications. It demonstrates the power of social media to amplify personal and political disputes, turning them into market-moving events. It also highlights the increasing entanglement of tech leadership with partisan politics and the potential risks this poses to business stability.

For Tesla, the feud adds further uncertainty during an already challenging period. The stock drop is not just a number; it impacts investor confidence, potentially affecting the company's ability to raise capital, attract talent, and execute its ambitious plans, including the robotaxi launch and AI development. The threat of government investigations and the potential loss of lucrative contracts with entities like NASA could have severe consequences for both Tesla and SpaceX.

For Trump, the feud with Musk, a figure popular in certain tech and business circles, could impact his standing with potential donors and voters who value innovation and business success. The decline in TrumpCoin also shows that his political brand is not immune to the negative financial consequences of public conflict.

The episode serves as a stark reminder of how the personal and political actions of powerful individuals can directly impact global markets and the operations of major corporations. As the lines between business, technology, and politics continue to blur, the volatility witnessed in the wake of the Musk-Trump feud may become a more frequent feature of the economic landscape. Investors, employees, and the public alike are left to navigate the unpredictable consequences when the world's most influential figures engage in public warfare on the platforms they control.

The coming weeks will be critical for Tesla as it attempts to launch its robotaxi service and for Musk as he navigates the political fallout from his confrontation with Trump. The threats of government action loom large, and the market will be watching closely to see whether the damage from this public feud is contained or if it leads to more lasting consequences for Musk's empire.