The $152 Billion Wipe out: How the Trump-Musk Feud Crushed Tesla Stock and Reshaped Corporate Politics
How the Trump-Musk Feud Crushed Tesla Stock and Reshaped Corporate Politics: The world’s richest man versus the world’s most powerful leader—a clash of billionaire egos that vaporized approx $152 billion of Tesla’s market value in a single day 25. On June 6, 2025, Elon Musk and Donald Trump’s alliance imploded in a spectacular public feud, triggering Tesla’s worst trading day ever and erasing nearly all its post-2024 election gains 39. This unprecedented meltdown exposed how deeply politics now drives Tesla’s valuation—and the fragility of corporate power in polarized America.
Elon Musk latest project
Elon Musk latest project: Elon Musk continues to push technological boundaries with an array of ambitious projects, but his latest focal point is undoubtedly xAI, his artificial intelligence venture. Beyond refining Tesla’s autonomous driving and advancing SpaceX’s Starship for Mars colonization, Musk is pouring significant resources into xAI, recently acquiring X (formerly Twitter) to integrate powerful computational resources like the Colossus supercomputer. This aggressive expansion, including a massive $6 billion funding round, aims to position xAI and its Grok chatbot as a formidable competitor in the rapidly evolving AI landscape, reflecting Musk’s drive to “understand the true nature of the universe” through advanced AI.
The Spark: From Allies to Enemies
Just days after Musk concluded his 130-day role as a White House special adviser, the relationship detonated over Trump’s $3 trillion “Big Beautiful Bill.” Musk blasted it as a “disgusting abomination” on X, urging followers to “kill the bill” over deficit concerns. Trump retaliated on Truth Social:
- “Elon has gone CRAZY!”—accusing Musk of sour grapes over EV subsidy cuts
- Threats to terminate “billions in government contracts” for Tesla and SpaceX
- Musk fired back: “Without me, Trump would have lost the election” and hinted at Trump’s ties to Jeffrey Epstein
Within hours, Tesla stock plummeted 14%, while Musk’s net worth fell by $34 billion
The Immediate Fallout: Market Carnage and Brand Erosion
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Table: Tesla’s Market Value Collapse (June 5–7, 2025)
| Metric | Pre-Feud | Post-Feud | Change |
| Market Cap | $1.04 trillion | $892 billion | -14.2% |
| Weekly Performance | -15% | Worst since 2023 | |
| 2025 Losses (YTD) | — | $380 billion | |
| Global Market Rank | 8 (Jan 2025) | 10 |
Beyond the numbers, the feud accelerated a brand crisis years in the making:
Political polarization: Liberals already boycotted Tesla over Musk’s far-right ties. Now, conservatives abandoned the brand, leaving “no one left to prop up sentiment”
- Political polarization: Liberals already boycotted Tesla over Musk’s far-right ties. Now, conservatives abandoned the brand, leaving “no one left to prop up sentiment”
- Regulatory threats: Trump could cripple Tesla’s robotaxi ambitions by pressuring regulators to block FSD approvals
- Subsidy reliance: Ending EV tax credits (proposed in Trump’s bill) would cost Tesla $1.2 billion in 2025 profits
Tesla’s Preexisting Vulnerabilities: More Than Just Politics
The feud ignited losses, but Tesla was already on shaky ground:
- Sales collapse: Q1 2025 profits fell 71%, with European deliveries down 50% YoY
- Rising competition: BYD and other Chinese EV makers flooded global markets
- Quality issues: Cybertruck faced 8 recalls in 15 months
- Leadership distractions: Musk split time between SpaceX, xAI, Neuralink, and politics
Table: Revenue Risks from Government Actions
| Policy Threat | Impact on Tesla | Value at Risk |
| End of EV tax credits | Reduced consumer demand | $1.2 billion profit |
| Weakened emissions credits | Lower revenue from rival automakers | $2 billion/year |
| SpaceX contract termination | Loss of NASA/DOD revenue | “Billions” |
The Business Fallout: From Subsidies to Space
Trump’s retaliation threats struck at Musk’s empire:
- SpaceX in jeopardy: Musk threatened to decommission Dragon spacecraft before backtracking 3. Federal contracts underpin SpaceX’s $180 billion valuation.
- Emissions credit dependency: Tesla earned $2.8 billion in 2024 selling regulatory credits—revenue at risk if Trump weakens state environmental rules
- Robotaxi roadblocks: Austin’s June 12 launch faces regulatory uncertainty. A federal crackdown could “invalidate full self-driving,” crushing Tesla’s $1 trillion AI valuation thesis
Wall Street’s Divided Response: Bulls vs. Reality
Analysts scrambled to interpret the chaos:
- Optimists: Wedbush’s Dan Ives called the selloff “overdone,” predicting “cooler heads will prevail”. Morgan Stanley cited Tesla’s “apolitical” AI and robotics upside
- Pessimists: GLJ Research warned emissions credit losses could trigger “full-scale collapse”. CFRA anticipated “near-term volatility”
- Governance critics: State comptrollers blasted Tesla’s board for allowing Musk’s “polarizing behavior”
The Path Ahead: Robotaxis, Reconciliation, or Ruin?
Tesla’s survival hinges on three scenarios:
- Truce: Musk and Trump reconcile, preserving subsidies/contracts. White House aides hinted at talks, but Trump dismissed Musk as “crazy”
- Robotaxi redemption: A successful June 12 Austin launch could shift focus to autonomy—a $1 trillion opportunity
- Permanent rift: Trump sells his Tesla Model S, tariffs hit Chinese-made equipment, and regulatory assaults escalate
The Bigger Picture: Corporate Power in the Political Crossfire
This feud reveals a harsh truth: 14% of Tesla’s valuation was a “corruption premium” tied to Musk’s White House access.With that advantage gone, Tesla faces a new reality—one where political entanglements pose existential risks. As New York Comptroller Brad Lander warned, Tesla’s crisis proves that “weak accountability measures threaten not only shareholder value, but the future of U.S. EV leadership”
The lesson for investors? When oligarchs battle, the market bleeds. Tesla’s future now depends on whether Musk can transcend politics with robotaxis—or whether his war with Trump becomes corporate America’s costliest grudge match.