Tesla stock tumbled more than 10% on Thursday as investors grew increasingly concerned that CEO Elon Musk’s escalating feud with U.S. President Donald Trump could pose a serious threat to the company’s federal support and future growth.
The sharp selloff erased over $100 billion from Tesla’s market value, a dramatic reversal after weeks of gains tied to Musk’s announcement of a new autonomous “robotaxi” service launching in Austin, Texas. The conflict erupted after Musk publicly claimed that Trump would not have won the election without his support, prompting a forceful response from the president on social media.
In a post on Truth Social, Trump suggested that the federal government might cut Tesla’s subsidies and contracts as a cost-saving measure, stating, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
The clash has rattled investors, many of whom view the future of Tesla as closely tied to federal policy, especially in the highly regulated realm of autonomous vehicle deployment. Analysts now fear that the Biden-era momentum toward driverless tech could be stalled or even reversed under Trump’s administration.
“There is a fear that Trump is not going to play Mr. Nice Guy when it comes to autonomous,” said Dan Ives of Wedbush Securities. “The whole goal of robotaxis is to have them in 20 or 25 cities next year. If you start to heighten the regulatory environment, that could delay that path.”
Tesla shares had doubled following Trump’s election win, peaking in December, only to fall during Musk’s brief and controversial tenure as head of a federal cost-cutting agency. Musk later pledged to refocus on Tesla, which reignited investor optimism and boosted the company’s valuation by more than $400 billion.
Now, the war of words with the president has reignited uncertainty about Tesla’s future trajectory, particularly around its reliance on government partnerships and its ambitious plans for a driverless future.