In a dramatic turn of events, Tesla Inc. experienced a significant 14% drop in its shares price on Thursday, erasing approximately $153 billion from its market capitalization. This sharp decline follows a public and escalating feud between Tesla CEO Elon Musk and U.S. President Donald Trump, raising investor concerns about potential political and regulatory repercussions for the electric vehicle giant.
The conflict intensified after Musk publicly claimed that President Trump would have lost the 2024 election without his support. In response, Trump threatened to cancel federal contracts with Musk’s companies, including Tesla and SpaceX. This exchange of criticisms on social media platforms has unsettled investors, leading to a massive sell-off of Tesla shares.
The market’s reaction underscores fears that President Trump may adopt an unfriendly stance against Musk’s business operations, potentially impacting the companies’ performance and future growth. The situation is further complicated by Musk’s previous involvement in the Trump administration, where he led the Department of Government Efficiency (DOGE), a role that had already caused unease among Tesla investors.
Adding to the turmoil, Musk announced that SpaceX would begin decommissioning its Dragon spacecraft, a move perceived as a direct response to the political tensions. This decision has raised questions about the future of Musk’s ventures and their reliance on government contracts.
Market analysts caution investors about the volatility of Tesla’s stock, suggesting it may be too risky to invest during the ongoing turmoil. The recent downturn comes after months of unease among Tesla investors, who have been wary of Musk’s political involvement and its potential impact on the company’s brand and operations.
As the feud between Musk and Trump continues to unfold, the long-term implications for Tesla remain uncertain. Investors and industry observers will be closely monitoring the situation, particularly any policy decisions from the Trump administration that could affect Tesla’s operations and profitability.
In the meantime, Tesla faces the challenge of navigating the political landscape while maintaining investor confidence and ensuring the stability of its stock. The company’s ability to manage this crisis will be crucial in determining its future trajectory in the competitive electric vehicle market.
