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President Trump said on Thursday that Elon Musk was upset about the repeal of an electric vehicle tax credit — a claim Mr. Musk swiftly rejected.
Change in Tesla’s share price since May 30
June 5, 2025Updated 5:27 p.m. ET
Tesla investors were rattled on Thursday by escalating tension between Elon Musk and President Trump, and the company’s stock plunged, wiping billions off the company’s market value.
The shares fell 14.3 percent for the day as Mr. Musk, Tesla’s chief executive, ramped up his public criticism of the House Republican domestic policy bill, calling it an “abomination.” The tumble — the company’s worst day since March and its second worst since 2020 — wiped out about $150 billion from Tesla’s market valuation.
A dispute over the policy bill spiraled in a matter of hours into a broader rupture in Mr. Musk’s relationship with the president, raising concern among investors about how the tensions might harm Mr. Musk’s businesses. Mr. Trump threatened to slash federal contracts and tax subsidies for Mr. Musk’s companies, which amount to billions of dollars.
“Investors fear that this Musk/Trump battle will stop their friendship and change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump administration,” analysts at Wedbush Securities said in a research note on Thursday. Their deteriorating relationship is “a shock to the market and putting major fear for Tesla investors on what is ahead.”
The Republican spending bill would end a $7,500 tax credit from the federal government that has helped reduce the cost of buying electric vehicles. Mr. Trump said on Thursday that Mr. Musk was upset about the electric vehicle tax credit repeal — a claim that Mr. Musk swiftly rejected. He shared a video clip of Mr. Trump speaking during a March promotional event for Tesla at the White House. The clip showed the president speaking, with Mr. Musk standing nearby: “I ended the EV mandate. He never even complained to me.”
The latest drop in Tesla’s shares adds to several months of turbulence for the company. Its stock rallied in the aftermath of Mr. Trump’s election, before falling in the early months of this year as consumer protests against Mr. Musk’s role in the Trump administration intensified.
