Shares of Tesla sank 14% on Thursday, after President Donald Trump told reporters he was considering canceling federal contracts tied to Elon Musk’s companies.
The drop pushed Tesla’s value to $916 billion, stripping it of its $1 trillion status and capping off a brutal week that has already seen shares fall nearly 18%.
Trump said the final straw was Elon’s anger over his administration’s decision to remove EV credits from the new spending bill. Speaking from the Oval Office, Trump said, “Elon and I had a great relationship. I don’t know if we will anymore. I was surprised.”
But the feud didn’t start there. On Truth Social, Trump wrote, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!”
Elon responded in real-time. “Whatever,” he posted bluntly as Trump made his remarks. But he didn’t stop there. Hours later, Elon posted on X, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”
That line was one of several shots Elon took at the president and the GOP throughout the day. He also called the bill a “disgusting abomination” and said he would support primary challengers against any Republican who votes for it.
Elon unloads after exit from government role
Elon’s public attacks followed the end of his brief term as head of Trump’s Department of Government Efficiency, or DOGE, which wrapped last Friday. Since stepping down, he’s gone hard against the White House and the tax plan attached to the budget. The timing has raised eyebrows across D.C. and Wall Street, especially as Tesla tries to manage crumbling sales overseas.
Despite a strong 22% rally in May, Tesla shares are now off nearly 30% from their peak price of $488.54 in December. Sales in Europe have dropped sharply, and the company’s brand reputation is slipping in the West.
Meanwhile, Tesla is under pressure to deliver on its long-promised driverless ride-hailing service in Austin, Texas. Elon has claimed testing is underway, but rival Waymo already launched its own robotaxi operation there in partnership with Uber.
The political fight also comes with money on the line. Elon has privately tried to push back against parts of Trump’s bill that would slash EV and solar tax credits—two major profit drivers for Tesla. On top of that, the bill introduces a new $250 annual fee on electric vehicle drivers, another hit to Tesla’s customer base.
Elon fumes over isaacman nomination and tax bill
Elon’s anger reached another level after the Trump administration pulled Jared Isaacman’s nomination to lead NASA. Jared, the billionaire founder of Shift4, had previously worked with Elon on two SpaceX missions in 2021 and 2024. He commanded both private spaceflights, and Shift4 confirmed in filings that it invested $27.5 million into SpaceX by June 30, 2021.
Walter Isaacson, who wrote Elon’s biography, said the rejection set Elon off. “That, to Musk, was just infuriating because they were going after Jared Isaacman… to get at Musk,” he told CNBC on Thursday. Walter added, “One of the things about Elon is when he goes all in, he goes all in. He is somebody who’s not exactly calibrated in these things, and he is seriously upset.”
Elon spent all of Wednesday unloading on X, ripping through the tax plan, and slamming the administration’s decisions. He didn’t hold back in blaming Trump and Republican lawmakers for what he described as sabotage. From lost incentives to rejected allies to new fees targeting Tesla drivers, Elon’s message was clear: the government has turned on him, and he’s going to hit back.
Right now, there’s no sign this fight is slowing down. Trump’s office hasn’t walked anything back. The spending bill is still moving. And as the two billionaires go at it, Tesla’s stock keeps falling, caught right in the middle of the wreckage.
