Tesla stock plunged 14% on Thursday, wiping out around $150 billion in market value, as a public feud between CEO Elon Musk and President Donald Trump sent shockwaves through financial markets.
The sharp decline marked one of the electric car maker’s worst trading days in months and raised new concerns about political risk tied to Musk’s high-profile clashes with the White House.
Tensions escalated after Trump threatened to pull federal contracts from Musk’s businesses, including SpaceX, which holds multibillion-dollar deals with NASA and the Pentagon. Musk fired back online, daring the president with “Go ahead, make my day.”
The dispute, which started over a Trump-backed spending bill, quickly turned personal and spilled across social media, with Musk criticizing tariffs and warning of a coming recession. Trump accused Musk of being upset over the rollback of electric vehicle tax credits and hinted his White House welcome was “wearing thin.”
“This must start to be calmed down,” warned Dan Ives, a senior analyst at Wedbush, in a note to clients. He said the fight spooked investors, who fear stricter regulatory scrutiny and a distraction from Tesla’s long-term strategy.
The market reaction underscored the growing discomfort among shareholders over Musk’s entanglement in politics. Some investors have expressed concern that the CEO’s attention is stretched too thin, especially following reports that the board had considered succession options.
Tesla’s stock had previously surged amid expectations of favorable treatment under Trump. But the relationship has since soured, with Musk’s opposition to recent policy moves drawing heat from the administration and dampening global sales, particularly in Europe.
Thursday’s slump dragged Tesla shares to their lowest level since May. Though still up 60% over the past year, the stock is down 25% since January.
“Can someone please take the phone away from him?” investor Ross Gerber posted, echoing frustration from shareholders worried about Musk’s public behavior.
The political crossfire comes just weeks after Musk stepped down from his government advisory role, promising to refocus on Tesla. But with tensions rising in Washington and Wall Street losing patience, the company’s future now looks increasingly entangled in the chaos.
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