Musk vs. Trump Fallout Costs Tesla $152 Billion in a Single Day
Tesla’s stock suffered its worst single‑day loss ever, tumbling around 14% on June 5, 2025—equating to a $152 billion haul wiped from its market capitalization—after a highly publicized feud erupted between Elon Musk and former President Donald Trump .
1. The Spark: Musk vs. Trump
- Musk publicly slammed Trump’s latest tax-and-spending package, labeling the “One Big Beautiful Bill” a “disgusting abomination”, as it included cuts to EV tax credits crucial to Tesla .
- Trump retaliated on Truth Social and in interviews, threatening to terminate subsidies and contracts for Tesla and SpaceX—moves that struck a chord with investors.
2. The Market Fallout
- Tesla shares dropped 14–14.3%, marking the stock’s largest single-day decline ever and pushing its valuation below $1 trillion temporarily.
- This collapse also dented Musk’s personal net worth by $34 billion, marking the second-largest daily loss ever for an individual .
- Some sources report the full drop at $152.5 billion, reflecting the intensity of the sell-off .
3. Broader Implications
▪ Political Risk
- Tesla now appears “politically homeless”, with its relationship to the Republican Party strained amid Trump’s threats .
▪ Regulatory Threats
- The absence of EV credits and pending withdrawal of federal contracts pose serious hurdles for Tesla’s robotaxi ambitions and growth trajectory .
▪ Investor Sentiment
- Analysts from firms like Morgan Stanley and Wedbush warn this showdown could hamper Tesla’s innovation plans, as rising political and regulatory uncertainty triggers more sell-offs .
4. What Comes Next?
- Tesla shares rebounded modestly (~4%) on June 6, but a full “truce” remains elusive, with Trump maintaining he won’t talk to Musk .
- Musk has deleted his anti‑Trump posts, possibly signaling a strategic retreat—but investors remain on edge .
- Looking ahead, any resolution—via renewed subsidies, eased government talks, or midterm market performance—could be pivotal in determining Tesla’s path.
Conclusion
The public clash between Elon Musk and Donald Trump sent shockwaves through Tesla, erasing over $150 billion in market value in hours. Beyond the immediate financial fallout, the episode highlights how political entanglements can rapidly destabilize even the most high‑flying companies, as Tesla’s future now hinges on the evolving balance between political risk, regulatory clarity, and investor confidence.
