Elon Musk and Trump Publicly Clash, Sending Tesla's Stock Plunging

A seismic clash between Elon Musk, CEO of Tesla, and U.S. President Donald Trump shook America's business and political arenas on June 5th local time, with their rapidly escalating feud triggering intense volatility in financial markets.

The conflict stems from a massive tax and spending bill passed by the U.S. House of Representatives on May 22nd. The Trump administration has hailed the bill as "big and beautiful," touting its provisions to cut taxes, reduce Medicaid, food assistance, education, and clean energy spending to redirect funds toward military and border security, while raising the debt ceiling to allow federal borrowing for debt financing. However, a key flashpoint is the exclusion of a tax credit policy for Tesla electric vehicle (EV) purchases from the bill, which has ignited Musk’s fierce opposition.

Musk had repeatedly criticized the bill in the lead-up, arguing it undermines his efforts at the Office of Government Efficiency to cut costs and would increase the budget deficit. In an interview with CBS released on June 1st, Musk stated he did not want to publicly oppose the U.S. government but also refused to take responsibility for all its actions, lamenting that his "Office of Government Efficiency" had become a "scapegoat." On June 3rd, he took to social media to call the bill "disgusting," and by the 4th, he intensified his attacks, urging Americans to "kill" the bill and declaring, "It’s wrong to bankrupt America."

Trump responded on June 5th by expressing "deep disappointment" in Musk, claiming the Tesla CEO was unhappy about the repeal of EV "mandates." He alleged Musk had understood the bill’s inner workings but only raised objections once the EV mandate repeal became apparent. Trump also withdrew his nomination of Musk-recommended Isaacman as NASA administrator, defiantly stating he could win Pennsylvania without Musk’s support.

Musk swiftly countered, accusing Trump of lying and revealing he had not even read the bill, which was rushed through late at night. He publicly called for Trump’s impeachment on social media, asserting the president could not have won the election without his help. Musk further criticized the bill’s "unfairness" in cutting EV incentives while leaving oil and gas subsidies intact. He went so far as to threaten to immediately terminate SpaceX’s Dragon spacecraft government missions and warned that Trump’s tariff policies could trigger a U.S. recession.

The public feud sent Tesla’s stock into a tailspin on June 5th. The stock plummeted as much as 17.72% intraday before paring losses to close at $284.7 per share, a 14.26% decline, with its market capitalization collapsing below $1 trillion to $916 billion—erasing over $1500 billion in value in a single day. This marks Tesla’s largest single-day market cap loss on record and dragged down the Nasdaq and S&P 500 indices, which fell 0.83%, 0.53% respectively, while the Dow Jones dropped 0.25%.

Trump’s own Trump Media & Technology Group (TMTG) also saw its stock dive 8.04% to $20.12 per share, reflecting the broad market impact of the conflict.

Analysts warn that regardless of the subsidy outcome, the public confrontation between Musk and Trump introduces uncontrollable risks to Musk’s business empire. JPMorgan Chase estimates that if the bill passes, combined with additional restrictions on regulatory credits, Tesla’s annual profits could face up to $3.2 billion in pressure. While SpaceX and Starlink dominate their respective markets, policy trends in Washington could still pose potential variables for their approvals and financial resources.

The Musk-Trump clash has sent shockwaves through both business and political circles, adding new uncertainties to America’s policy trajectory and economic outlook. All sides are closely monitoring how the situation unfolds and its potential far-reaching impacts on the U.S. and global economy, as well as the technology industry.