Trump Musk Feud Causes Tesla Shares to Plunge 14%

Donald Trump has launched a direct attack on Elon Musk, calling him “crazy” and warning that he might cancel Musk’s federal contracts. This marks a dramatic breakdown in their relationship and could significantly impact government dealings with Musk’s companies, including SpaceX and Starlink.

Trump’s criticism followed Musk’s disapproval of the president’s proposed tax bill, which Musk claimed was bad for the U.S. economy and full of “disgusting pork.” Trump accused Musk of turning against him only after losing influence in government and losing favorable EV policies. In a post on Truth Social, Trump threatened to slash Musk’s federal funding, saying it would be the easiest way to cut spending.

Musk responded on X, suggesting Trump should be impeached, warning his trade policies might cause a recession, and even bringing up the president’s alleged links to Jeffrey Epstein. Musk also hinted at forming a new political party and distancing himself from Republicans.

Tesla shares dropped nearly 14%, wiping over $150 billion in value — the largest single-day loss in the company’s history. Musk blamed the tax bill for favoring oil and gas industries while cutting support for clean energy, a core business area for Tesla.

Trump’s frustration appears tied to Musk’s growing independence and political power. Despite donating over $250 million to Trump’s re-election, Musk now regrets his support, saying Trump wouldn’t have won without him. “Such ingratitude,” Musk wrote.

The fallout has already affected NASA, with Trump pulling the nomination of Jared Isaacman, a Musk ally, to lead the agency. Several people from Musk’s team have also started exiting roles tied to the administration, including those working in Musk’s budget-cutting program “Doge.”

The feud could reshape U.S. political and business alliances, with Musk’s influence extending far beyond the current administration.

Despite the chaos, crypto markets have so far remained stable, even though both Trump and Musk hold cryptocurrencies and have previously influenced the space.

Summary: The escalating conflict between Donald Trump and Elon Musk has led to a series of public attacks and threats, with potential implications for government contracts and political alliances. Musk’s criticism of Trump’s tax bill and Trump’s subsequent threats to cut federal funding have highlighted the growing tension between the two figures. The fallout has already impacted NASA and other administration roles, and the feud could reshape U.S. political and business dynamics.

Analysis: The conflict between Trump and Musk underscores the complex interplay between politics and business in the U.S. Musk’s growing independence and political influence have led to a breakdown in his relationship with Trump, with both figures making public statements that could have significant implications for their respective companies and political agendas. The feud highlights the potential for political tensions to impact government contracts and business dealings, and could reshape alliances within the U.S. political and business landscape.