Musk-Trump Rift Wipes Out $15.2 Billion from Tesla’s Value Amid Policy Clash

Last Updated Jun - 06 - 2025, 03:13 PM | Source : Fela News

Tesla stock plunges as Musk-Trump rift deepens. Fallout from policy disagreement over EV subsidies causes $15.2 billion market loss, with investors reacting sha

A public fallout between Tesla CEO Elon Musk and former U.S. President Donald Trump triggered a sharp market reaction on Thursday, leading to a 14% drop in Tesla’s stock and wiping out approximately $15.2 billion from the company's market value. The dispute erupted after Musk criticized a new government spending and taxation bill backed by Trump, calling it a "waste of public funds" and "shameful." According to Musk, the bill was pushed through Congress without proper debate, sparking his frustration and triggering political backlash.

The primary flashpoint is the proposed removal of a $7,500 federal tax credit for electric vehicles—an incentive crucial to Tesla and other EV manufacturers. Musk’s strong opposition to the bill prompted Trump to respond aggressively, threatening to cut off government subsidies and contracts for Tesla. Trump claimed Musk had prior knowledge of the policy shift and accused him of reacting only when the EV tax benefit was targeted. The tension has quickly evolved into a high-stakes political and economic standoff, with global investors closely watching the developments.

The dispute sent shockwaves through financial markets. Tesla's 14% plunge not only dented the company’s valuation but also shaved an estimated $27 billion off Musk’s net worth in a single day. Market analysts note that investor confidence in Tesla remains vulnerable to political dynamics, particularly as policy uncertainty surrounding clean energy incentives increases. With the EV sector heavily dependent on government support, this escalating feud between two of the most influential figures in tech and politics could have long-term implications.