Tesla Stock Plunges After Elon Musk–Trump Feud Erupts Publicly, Wipes Out $100 Billion in Value

Tesla’s volatile stock took a massive hit after a high-profile clash between CEO Elon Musk and President Donald Trump sent shockwaves through Wall Street. The feud, ignited by political disagreements over a controversial Republican budget bill, triggered a selloff that saw Tesla shares drop over $47 in a single day, erasing more than $100 billion in market value.

Unlike typical stock drops driven by recalls or earnings, this one stemmed entirely from a political meltdown on social media between two of the most influential figures in tech and politics.

Musk had controversially aligned himself with Trump’s re-election campaign, reportedly contributing hundreds of millions in donations and securing a ceremonial advisory role in the so-called Department of Government Efficiency. The partnership raised eyebrows, as Tesla’s clean energy mission clashed starkly with Trump’s fossil-fuel-friendly agenda.

Initially, investors bet heavily on the alliance, pushing Tesla’s stock higher in hopes of regulatory favoritism. But the relationship soured dramatically after Musk publicly criticized the new GOP budget, calling out its potential to explode the national deficit and remove crucial EV incentives.

The budget bill, while lacking an official “EV mandate,” does eliminate the $7,500 federal EV tax credit—a blow to Tesla, which has long benefited from such subsidies. Trump hit back hard, accusing Musk of selfish motives, while Musk retaliated with damning personal attacks, even invoking the Epstein scandal and demanding Trump’s impeachment.

Things escalated further when Trump threatened to cut SpaceX’s government contracts. Musk responded by threatening to ground NASA missions, throwing a wrench into critical space programs.

As the political drama unfolded, investors lost faith in any future regulatory advantages for Tesla, and the stock plummeted. Analysts now warn of renewed SEC, DOJ, and NHTSA investigations, with Musk’s political fallout potentially triggering retaliatory oversight.

Tesla faces these challenges while already contending with a tarnished brand image and a sharp 50% drop in European sales. Once beloved by environmentally conscious consumers, Tesla is now viewed by many as too politically divisive—a perception shift damaging sales across key markets.

The drama isn't over. Despite a slight recovery—Tesla shares rebounded to $299.32 in pre-market trading—the brand is in for a bumpy ride. With tax credits disappearing, federal scrutiny intensifying, and brand loyalty slipping, Tesla may be headed for its toughest year yet.