Quick overview

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The growing feud between Elon Musk and Donald Trump is fueling political and financial uncertainty around Tesla, further shaking investor confidence.

The once-close relationship between the former U.S. President and Tesla’s CEO—who had once referred to himself as Trump’s “first friend”—came crashing down this Thursday amid a series of sharp accusations. As tensions escalated, Tesla shares plummeted 14.3% on Wall Street, wiping out over $150 billion in market value in a single day as traders dumped the stock en masse.

The sell-off intensified after Musk ramped up criticism of Trump’s proposed tax legislation. In response, Trump accused Musk of being upset because the bill removes tax credits for electric vehicle purchases. Investors now fear the fallout between the two powerful figures could undermine Musk’s sprawling business empire.

“Look, Elon and I had a great relationship. I’m not sure we still do,” Trump said. “He used to say very beautiful things about me. And he hasn’t attacked me personally. But I’m very disappointed.”

Musk’s Harsh Attacks on Trump’s Tax Plan

In recent days, Musk—CEO of Tesla, SpaceX, and Starlink, and the world’s richest man—has become increasingly vocal in his opposition to the president’s fiscal reform. Once a key figure in the Department of Government Efficiency (DOGE), Musk has since distanced himself from the White House to focus on his companies.

Posting on his platform X, Musk called on Congress to repeal the legislation, denouncing it as a “disgusting abomination.”

“It completely undoes the savings achieved by the DOGE team—at great cost and personal risk,” he wrote. Musk remains the largest donor to the Republican Party’s 2024 presidential campaign.

Fallout Beyond Wall Street

Musk’s leadership in DOGE and ties to the Trump administration had already alienated some Tesla customers. Sales of Tesla vehicles have declined in Europe, China, and key U.S. markets like California—even as global EV sales continue to grow.

Meanwhile, Musk’s other ventures, SpaceX and Starlink, continue to dominate their respective markets but are also under scrutiny due to their close regulatory relationships with the Trump administration. Starlink in particular has gained traction among foreign governments, bolstered by Musk’s international political connections.

In recent weeks, Musk has been visibly distancing himself from the White House, amid a growing wave of protests against Tesla.