Tesla stock tumbled sharply Thursday as a high-profile clash between President Trump and Elon Musk played out in public. What started as a disagreement over Trump’s major tax and spending proposal quickly spiraled into a personal and political feud that spilled across social media platforms.
Musk, who left the administration just days earlier, began by criticizing the sweeping legislation, calling it wasteful and financially reckless. His remarks drew a response from the president, who expressed disappointment and hinted at cutting off lucrative federal contracts tied to Musk’s companies.
In retaliation, Musk claimed he had played a decisive role in Trump’s re-election victory and even floated the idea of launching a new political party aimed at centrist voters. The feud escalated when Musk referenced Trump’s alleged connections to sensitive materials, adding a layer of controversy.
As tensions intensified, Tesla shares dropped 14.6 percent by market close, marking one of the company’s steepest one-day declines this year. Investors appeared rattled by the growing uncertainty surrounding Musk’s public battles and the potential fallout for Tesla’s government-linked projects.
Musk, who reportedly contributed hundreds of millions to Trump’s 2024 campaign, was a prominent figure in the administration’s early months. He held a leadership position in a federal office focused on cutting government waste and streamlining operations.
Since stepping down, Musk has ramped up his opposition to key parts of the administration’s agenda particularly the latest spending bill, which he says would inflate the national debt and benefit entrenched interests.
President Trump responded by suggesting the rift came as a surprise, stating that Musk had supported the bill in private and only turned critical after leaving his post. The president said he had long backed Musk and was disappointed in the turn their relationship had taken.
The unfolding dispute has now moved beyond policy and into the realm of political strategy, with Musk openly questioning the direction of the current administration and hinting at alternative paths forward. Meanwhile, the markets continue to watch closely as the conflict between two powerful figures shows no signs of cooling.