Tesla’s value wiped out by billions after Elon Musk again provokes Trump

Tesla shares plunged more than 7% on Tuesday, wiping out billions of dollars in market value for the electric carmaker as the feud between CEO Elon Musk and President Donald Trump flared up again.

Shares closed down $16.95, or 5.3%, at $300.71 a share — a significant drop from their previous close of $317.66. The stock is down nearly 25% this year.

The Nasdaq-listed stock’s decline followed a new round of attacks from Trump on the Truth Social platform, in which he threatened to cut off federal subsidies to Musk’s companies, including Tesla and SpaceX.

“Elon probably gets more subsidies than anyone in history, and if he didn’t get them, Elon would probably have to close his company and go back to South Africa,” Trump wrote Tuesday morning. “No more rocket launches, satellites, or electric cars and our country would save a ton of money. Maybe we should let DOGE take a look at this? IT WOULD SAVE A LOT OF MONEY!!!”

The attack came just hours after Musk sharply criticized the Senate’s early passage of Trump’s sweeping tax and spending bill, which includes provisions to cut the electric vehicle tax credit.

Billionaire Elon Musk and President Donald Trump. Photo: Getty Images

The move could cost Tesla an estimated $1.2 billion in annual profits. In a post on X, Musk called the bill “absolutely insane and destructive [with] incentives for industries of the past and massive harm to industries of the future.”

Musk, who once headed the federal agency DOGE (Department of Government Efficiency), has repeatedly criticized the bill, saying it breaks his campaign pledge to cut government spending.

“Anyone who campaigned on a PROMISE to REDUCE SPENDING, but still voted for the BIGGEST DEBT LIMIT IN HISTORY will see themselves on this poster in next year’s primaries,” Musk wrote Monday night, along with an AI-generated image of Pinocchio labeled “liar.”

Trump’s response came soon after.

“Elon Musk knew, long before he strongly endorsed me for President, that I was adamantly opposed to the Electric Vehicle Mandate,” the president wrote, signaling a deeper political rift between the two billionaires.

The war of words marked a return to tensions seen in June, when a similar social media spat wiped out more than $150 billion in Tesla’s value in a single day — a clear sign that investors were concerned about the political risks of Musk’s high-profile clashes.

Wedbush analyst Dan Ives warned in a note on Tuesday that the drama was making shareholders tired.

“The Musk-Trump spats will continue as the budget bill moves through Congress, but Tesla investors want Musk to focus on running Tesla and stop this political angle… which has been a roller coaster ride in its own right since the November election,” Ives wrote.

“Ultimately, being antagonistic to Trump will not work out… and Musk knows this, Tesla investors want this back-and-forth to end,” he added.

Adding to the pressure on the stock, new data showed Tesla sales in Sweden and Denmark fell for the sixth straight month in June. The company will report global vehicle delivery figures on Wednesday, with analysts forecasting an 11% year-over-year decline.