Tesla Plunges After Musk-Trump Clash Escalates: What Investors Need to Know as $151 Billion Vanishes Overnight
Elon Musk and Donald Trump’s heated public fallout sends Tesla stock into a tailspin, erasing billions in market value overnight.
- 14.3% — Tesla’s closing share loss on Thursday
- $151 billion — Market value wiped out in one day
- $20 billion — SpaceX federal contracts since 2008
- 2.4 trillion — Projected 10-year deficit increase from pending bill
Tesla’s turbulent relationship with Washington exploded onto the public stage Thursday as an online war of words between CEO Elon Musk and former President Donald Trump ripped through Wall Street. The fallout was instant — Tesla’s shares crashed by as much as 18% in intraday trading before clawing back some ground, ending the session down 14.3% and erasing $151 billion in market value. The carnage continued after hours.
The conflict’s catalyst? A brewing battle over an ambitious tax-and-spend bill, now barreling toward the president’s desk. Musk unleashed a public tirade, branding the legislation “a disgusting abomination” for its multi-trillion-dollar price tag. Not to be outdone, Trump fired back on social media, suggesting the government should save “Billions and Billions” by cancelling federal contracts and subsidies flowing to Musk’s companies.
The consequences stretch far beyond personal insults. SpaceX, Musk’s rocket company, has locked in nearly $20 billion in federal contracts since 2008, according to USA Today. Investors now fear Trump’s suggestions could quickly move from rhetoric to reality — threatening a key revenue stream.
Meanwhile, Musk went on the offensive, questioning America’s two-party system and floating the idea of a new political force to represent the “80% in the middle.” The billionaire pinned the call to action atop his X (formerly Twitter) feed, stoking further political intrigue.
The public feud slammed Tesla’s investor confidence. Top analysts told CBS News the Musk-Trump relationship has descended from a friendly alliance to outright hostility, sending “shivers” through the tech and auto sectors. Their relentless personalities signal the spat is unlikely to cool soon.
Q&A: What Happened Between Musk and Trump?
Q: Why are Tesla shares dropping so fast?
A: The sharp selloff was triggered by Trump’s public threat to strip Musk’s companies of lucrative federal contracts, combined with Musk’s aggressive criticism of Trump’s proposed spending bill.
Q: How much does Tesla—or Musk’s other companies—rely on federal money?
A: SpaceX has received around $20 billion since 2008. While Tesla’s direct subsidies have decreased, some manufacturing and energy projects still benefit from government incentives.
How Could This Feud Affect Tesla and the Market?
The Musk-Trump standoff isn’t just talk. Increased scrutiny on federal deals for Musk’s ventures could pressure revenues for SpaceX or Tesla. With Congress debating the country’s fiscal future, any real clampdown would force rapid recalculations by investors, suppliers, and auto buyers.
Electric vehicle demand, already volatile, may wobble if consumer confidence in Tesla’s long-term vision erodes. Watch for ripple effects on the entire EV industry — and major tech stocks.
Check out the latest financial news at Bloomberg or deeper market analysis from Reuters.
How to Protect Your Portfolio in Volatile Markets
– Diversify beyond individual tech stocks.
– Pay attention to government policy changes affecting federal contracts or green energy incentives.
– Consider hedging with funds that track the broader market for stability.
– Monitor public statements from influential CEOs and politicians that could impact sentiment.
Stay Informed and Ready—Act Now:
- Track official updates from Tesla and SpaceX
- Watch government statements on stimulus bills and contracts
- Review your investments for overexposure to controversial companies
- Consult trusted financial news sources for real-time market shifts
Don’t let headlines blindside your finances—stay sharp, stay diversified, and keep abreast of the unfolding Musk-Trump saga!