Market Turmoil: Tesla Shares Suffer Significant Decline Amid Political Disputes
On Thursday, Tesla’s stock experienced a dramatic decline, driven by escalating tensions between CEO Elon Musk and former President Donald Trump. The company’s shares plunged approximately 14.3%, wiping out over $150 billion from its market capitalization in a single trading session. This downturn marked Tesla’s most severe day since March, when its stock plummeted nearly 15% amid widespread backlash against Musk’s involvement in the Trump administration.
Political Disagreements Shake Investor Confidence
The sharp drop coincided with a public exchange of criticisms between Musk and Trump, following Musk’s disapproval of the recent “One Remarkable Gorgeous Invoice,” a comprehensive tax and spending bill passed by the House last month. The legislation, now facing hurdles in the Senate, includes provisions that phase out incentives for electric vehicles-an area directly impacting Tesla’s core business-and could diminish Musk’s personal wealth and influence.
From Ally to Adversary: The Changing Dynamics
Not long ago, Musk was considered one of Trump’s most loyal supporters, contributing millions to his campaigns and leading the Department of Government Efficiency during his presidency. However, Musk’s stance shifted sharply in late May when he publicly expressed dissatisfaction with the proposed tax and spending package, resigning from his government role shortly thereafter. Within days, Musk began criticizing the bill on social media, describing it as a “disgusting abomination.”
Public Spat Escalates
The feud intensified on Thursday, with Trump telling reporters that, although he and Musk once shared a strong relationship, that bond might now be irreparably damaged. Trump expressed disappointment, stating, “I’ve helped Elon a lot,” and questioned whether they could still work together. Musk responded on X (formerly Twitter), asserting, “Without me, Trump would have lost the election,” and lamenting what he called “such ingratitude.”
Broader Political and Personal Attacks
The exchange quickly devolved into a series of accusations. Trump claimed to have dismissed Musk from his advisory role and threatened to revoke billions of dollars in government contracts awarded to Musk’s companies. Conversely, Musk called for Trump’s impeachment and suggested, without evidence, that Trump is connected to Jeffrey Epstein’s files-documents linked to the convicted sex offender and financier-further fueling the controversy.
Implications for Tesla and Musk’s Political Ties
The recent decline in Tesla’s stock underscores the volatility surrounding Musk’s political associations. While Tesla’s shares initially rose following Trump’s election in 2016, they experienced a significant decline earlier this year amid consumer boycotts and concerns over Musk’s political entanglements. The current downturn reflects the broader uncertainty about Musk’s influence and the potential impact of political disputes on Tesla’s market performance.
As the situation unfolds, investors and industry observers are closely monitoring how Musk’s evolving relationship with political figures will shape Tesla’s future trajectory and the broader electric vehicle market.
