Tesla Loses $152 Billion Market Value Amid Musk Trump Feud

Tesla's market capitalization experienced a dramatic decline of $152 billion following a public dispute between CEO Elon Musk and Donald Trump. The significant drop in market value was a direct response to the escalating tensions between the two influential figures. The feud began when Musk, who also leads SpaceX and xAI, publicly criticized Trump's signature tax-cut bill, which included provisions that could negatively impact Tesla's electric vehicle (EV) and residential solar businesses. Musk's opposition to the bill led to a series of heated exchanges, with Trump threatening to pull government contracts for Musk's companies.

The market's reaction was swift and severe. Tesla's shares fell by 14% on Thursday, marking one of the company's worst trading days on record. The decline wiped out $152 billion in market value, bringing Tesla's market capitalization below $1 trillion to $916 billion. This dramatic loss underscored the market's sensitivity to geopolitical and regulatory risks, particularly those involving high-profile figures like Musk and Trump.

The dispute between Musk and Trump has been ongoing for some time, with Musk previously serving as the head of Trump's so-called Department of Government Efficiency. However, his term ended on Friday, and since then, he has been more vocal in his criticism of the Trump administration. Musk's outspoken nature and his tendency to go "all in" on his positions have been noted by observers, who see his actions as a reflection of his deep-seated beliefs and frustrations.

The tax-cut bill in question includes measures that could impose a new annual $250 fee on EV drivers and curtail incentives for EV and residential solar, which are key revenue streams for Tesla. Musk's efforts to convince Trump and other GOP members to modify these aspects of the bill have so far been unsuccessful, leading to the current impasse.

Despite the significant market loss, Tesla's shares have since shown signs of recovery, rising by 4% in the following session. This rebound suggests that the market may be stabilizing as the initial shock of the dispute wears off. However, the long-term impact of the feud on Tesla's market value and business operations remains to be seen. The company's ability to navigate regulatory challenges and maintain its competitive edge in the EV market will be crucial in determining its future performance.