The dramatic public fallout between former allies Donald Trump and Elon Musk has sent Tesla Inc. into a nosedive, with the electric vehicle giant now officially the worst-performing large-cap stock of 2025.
Tensions exploded after Trump’s Republican-led House passed the “Big Beautiful Bill,” a sweeping rollback of green energy policies that eliminated tax incentives for electric vehicles. The move, dubbed an “EV-killer” by critics, triggered a sharp sell-off in Tesla shares, which plunged over 14% in a single day, erasing $152 billion in market value. Since the start of the year, Tesla has lost more than $380 billion in total—dropping its market capitalization to $917 billion, a 29.3% decline that threatens to knock it out of the global top 10.
Musk’s increasingly vocal political ambitions and polarizing affiliations with far-right figures had already begun to spook investors. But Thursday’s spectacular blow-up between Musk and Trump, once considered close allies, appears to have marked a breaking point.
In a fiery exchange on X (formerly Twitter), Musk accused Trump of ingratitude:
“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate… Such ingratitude.”
He went further, suggesting Trump “should be impeached”, and controversially called on JD Vance to take over the presidency. Musk also referenced Trump’s alleged connections to Jeffrey Epstein, suggesting damaging revelations may emerge.
The dispute has not only rocked financial markets but also jeopardized billions in government contracts for both Tesla and SpaceX. Trump has publicly hinted at stripping Musk’s companies of their federal subsidies and defense contracts, which the Tesla CEO described as a direct threat to American innovation.
Musk’s net worth has also taken a personal hit, down nearly $9 billion according to Bloomberg’s Billionaire Index.
Amid Trump’s renewed push for fossil fuels—embodied in his first executive order of the year, “Drill, Baby, Drill”, aimed at boosting domestic oil production—EV demand has cooled, and investor sentiment has shifted rapidly.
While Musk once enjoyed Oval Office access and insider influence at Mar-a-Lago summits, the collapse of this high-stakes alliance now leaves one of the world’s most influential CEOs in political and financial freefall.