Tesla shares fell sharply on Thursday, dropping over 8% to close at $303.90, after President Donald Trump publicly criticized Tesla CEO and ally Elon Musk over his opposition to the sweeping tax-cut and spending bill proposed by the Trump’s administration.
The sell-off wipes billions from Tesla’s market value and adds new volatility to an already tense relationship between the two powerful figures.
The drop in Tesla shares follows Musk’s vocal condemnation of the proposed legislation, which includes the elimination of the $7,500 federal electric vehicle (EV) tax credit, expected to touch Musk’s business in no small way.
“This bill is a disgusting abomination,” Musk said in a social media post. “It blows up the deficit while slashing support for American clean energy. Congress must reject it.”
Reacting to Musk’s comment, President Trump responded pointedly in his usual style during remarks at a campaign event in Pennsylvania: “I’m very disappointed in Elon. I’ve helped Elon a lot. Without me, you wouldn’t have SpaceX doing what it’s doing. I made it happen.” He added, “Sometimes people leave the administration, and then they miss it. Some embrace it, and some become hostile.”
The EV tax credit, scheduled for phase-out under the bill, is seen as a key driver of Tesla’s U.S. sales. Analysts estimate its removal could cost the company more than $1.2 billion in profits and a further $2 billion in regulatory credit revenues over the next few years.
The feud has sparked concern among investors. “The market doesn’t like uncertainty—especially when it involves policy risk from the top,” said Wedbush analyst Dan Ives. “This bill directly hits Tesla’s bottom line.”
Tesla also faces external pressures, including slowing demand in Europe and China and increased competition from new EV players.
Despite the turmoil, Tesla remains the world’s most valuable automaker by market cap.
But the escalating rift between Musk and Trump may continue to weigh on both investor sentiment and the policy landscape for EVs.
Recall Musk is being credited for helping Trump secure a comeback to the White House in the 2024 U.S. presidential election, following his formidable support on-ground and online, especially through Twitter, a platform owned by Musk, as well as heavy political donations to the Trump’s campaign.
Pan-Atlantic Kompass had reported that Musk recently quit Trump’s administration as the Head of Department of Government Efficiency (DOGE), saying, “I’m now focused 24/7 on our core companies—Tesla, X, SpaceX, and xAI. I’ll be sleeping in factories, conference rooms, and server centers again.”
