Tesla Inc. shares tumbled over 14% on Thursday after a social media clash erupted between U.S. President Donald Trump and Tesla CEO Elon Musk.
Tensions between the two, which many insiders had long predicted would eventually boil over, reached a breaking point following the passage of the controversial congressional spending bill on May 22, 2025.
Nicknamed the “One Big Beautiful Bill,” the legislation makes tax cuts permanent, raises military spending, and adds a 3.5% tax on cross-border transfers.
- Of particular concern to Elon Musk, the bill also proposes eliminating the $7,500 Federal credit offered to electric vehicle buyers, a move that could significantly reduce demand for Tesla cars.
Just days after the bill passed by the House and moved to the Senate, Trump withdrew Jack Isaacman’s NASA nomination, Musk’s pick, further straining their relationship.
The feud spilled into the open on Tuesday when Musk posted on his platform, X: “I can’t take this anymore.”
Trump responded on Thursday, claiming Musk only objected to the bill when he realized it might hurt his business. Musk fired back with a string of sharp remarks, an exchange that likely unsettled investors.
The fallout triggered a massive sell-off, sending Tesla stock into a tailspin.
The “One Big Beautiful Bill”
The core of the growing feud between Elon Musk and President Donald Trump centers on the “One Big Beautiful Bill,” a major piece of legislation now under consideration in the Senate.
- It is a key part of Trump’s campaign promises, aimed at making his 2017 tax cuts permanent, and increasing funding for border security and defense.
One notable provision would exempt tipped workers earning less than $160,000 a year from paying federal income tax on their tips.
- However, while the bill promises $3.7 trillion in tax cuts, the Congressional Budget Office warns it would also add $2.4 trillion to the national debt over the next decade and raise the debt ceiling by $4 trillion.
For Tesla, the potential impact is significant. The bill proposes ending the $7,500 federal credit for electric vehicle buyers, an incentive that has helped drive Tesla sales. If it is removed, the company could face a drop in demand.
Musk did not hold back. On Tuesday, he took to X and posted:
“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it—you know you did wrong.”
President Trump responded on Thursday, suggesting Musk’s objections were motivated by self-interest.
“He only developed a problem when he found out that we’re going to have to cut the Electric Vehicle mandate,” he said.
Musk quickly hit back, calling the president ungrateful as the two sparred publicly online.
By the end of Thursday, June 6, Tesla’s stock had dropped 14.26% at the close of trading in New York, as nervous investors likely reacted to the public clash.
Market trend
Tesla began 2025 at $390.10, showing slight gains, with most of the company’s progress occurring in the third week of January.
- However, starting in the first week of February, the stock experienced a sharp decline, falling below the $300 mark and closing February at $292.98.
- By late March, TSLA had lost over 35% of its value since February, with more than 2 billion shares traded, while Elon Musk advised investors to hold on.
Although it staged a recovery in April and May, the stock crashed by 17.8% month-to-date in early June due to the ongoing feud.
