If you’ve been keeping up with Tesla, you probably saw the stock take a fall yesterday, down over 14% in one day and even lower in after-hours trading. Why? A reported blow-up between Elon Musk and Donald Trump is frightening investors and putting Tesla squarely in the middle of a political firestorm.
From bromance to blow-up
After staking out the campaign trail years ago, Musk and Trump are now fighting each other — and Tesla is paying the price. Musk, who had been moonlighting as a government efficiency adviser (tongue in cheek under the Department of Government Efficiency, or “DOGE”), stepped down in May. Shareholders were greeted with the full-time return of Musk. Tesla was seemingly back on the mend for a short time.
But that optimism would not last. Musk’s blistering denunciation of the GOP’s new tax bill, supported by Trump, set off a chain reaction. Musk called the bill a “disgusting abomination” and condemned its $2.4 trillion price tag. Trump hit back by stating he was “very disappointed” with Musk — and even threatened to terminate all federal contracts and subsidies to Musk’s companies.
The market reacts — and not positively
Wall Street wasn’t pleased with this soap opera. Tesla stock has now lost nearly 20% in the past five days. Thursday alone saw a 14.26% fall, the largest two-day drop since November 2021. It was summed up best by Wedbush Securities’ Dan Ives: “This became basically a high school friends feud.”
Investors are in terror that this struggle might usher in real consequences in the form of reduced government indulgence or regulatory obstacles for Tesla’s self-driving tech. The ambiguity is costing the stock — and your holdings if you’re a TSLA investor — dearly.
Musk lashes out — and raises the stakes
Musk was not shy. He went to his platform X and proclaimed that Trump is indebted to his political success to him. He then dropped a bomb Epstein allegation and went so far as to call for Trump to be impeached and replaced by VP JD Vance.
In a moment of shock for both the political and tech worlds, Musk wrote: “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files.” Trump responded by threatening to end all of Musk’s federal contracts, which led Musk to post a tongue-in-cheek alert that SpaceX would start to retire its Dragon spacecraft, an integral part of NASA’s space program.
What this means for you — and Tesla’s future
So, what now? If you’re holding Tesla stock, the next few weeks might feel like a rollercoaster. Wedbush still maintains a bullish view on Tesla long term, but this feud is making it harder to ignore the risks, especially if Trump wins another term and reshapes the EV landscape with less favorable policies.
For now, it’s clear that the Musk-Trump fallout is more than just personal — it’s political, financial, and very public. And if you’re watching Tesla’s share price, you’re watching the fallout unfold in real time.
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