Trump and Musk's feud led to Tesla's biggest drop in market value in history
Tesla shares fell 14% on Thursday, June 5, after US President Donald Trump threatened to terminate government contracts with Elon Musk's companies, CNBC reports.
This move led to a $152 billion drop in the company's market capitalization, the largest single-day drop in Tesla's history.
Thus, the company's market capitalization fell below the $1 trillion mark – to $916 billion.
The reason was a public dispute between Tesla CEO Musk and Trump over a new budget bill that would eliminate tax breaks for electric vehicles.
"Elon was 'exhausting himself.' I asked him to leave, I took away his mandate for electric cars that no one needed (he knew for months I was going to do!), and he just went crazy!" Trump wrote on his social network Truth Social.
"Without me, Trump would have lost the election, Democrats would have controlled the House of Representatives, and Republicans would have been 51 to 49 in the Senate," Elon Musk wrote on Twitter.
Musk also accused Trump of involvement in the case of financier Jeffrey Epstein, who was accused of sex trafficking and having relations with minors.
According to Musk's biographer Walter Isaacson, the businessman feels betrayed, especially after the Trump administration blocked the appointment of his ally Jared Isaacman as head of NASA.
Tesla shares fell despite a 22% gain in May. But the company has already lost nearly 18% this week. The stock has fallen nearly 30% overall in 2025.
In addition to political pressure, Tesla faces challenges in the market: declining sales in Europe, a deterioration in the brand's reputation, and competition in the driverless taxi segment in Texas, where Waymo already cooperates with Uber.
Analysts note that Musk is in a state of conflict not only with politicians but also with the market, and Tesla's future now looks increasingly uncertain.
The dispute between Musk and Trump could affect the United States space industry, as mutual threats have begun to revolve around SpaceX.
- In May 2025, Musk announced that he was ending his work with the US government as a special civil servant.
- On May 30, The New York Times published an investigation that said Elon Musk regularly used ketamine and ecstasy while working with Trump.
