Shares of Tesla, the electric vehicle manufacturer led by Elon Musk, plummeted over 14% on Thursday, erasing nearly $150 billion from the company’s market value. Investors are increasingly concerned that Musk’s ongoing feud with former President Donald Trump could adversely affect Tesla’s future. The tension escalated after Musk claimed that Trump wouldn’t have won the presidency without his support. In response, Trump suggested on his social media platform, Truth Social, that he might leverage the federal government against Musk’s ventures, including Tesla and SpaceX. “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” he wrote, adding that he was surprised Biden hadn’t done it already.
The drop in Tesla’s stock price comes at a time when the company was experiencing a resurgence, following Musk’s announcement that Tesla would begin testing its autonomous “robotaxi” service in Austin, Texas. Investors are now on edge, fearing that Trump’s remarks signal an impending regulatory crackdown that could hinder the rollout of self-driving cars across the U.S. “There is a fear that Trump is not going to play Mr. Nice Guy when it comes to autonomous,” said Dan Ives, an analyst at Wedbush Securities. He emphasized the urgency for Tesla to launch robotaxis in 20 to 25 cities next year, cautioning that heightened regulations could significantly delay these plans.
While the focus has been on Tesla, Trump’s threats appear to target SpaceX more directly. The rocket company has received substantial government contracts for missions to the International Space Station and other NASA projects. Moreover, SpaceX is under pressure to develop a mega rocket for lunar missions next year. Another enterprise of Musk’s, Starlink, a satellite internet service, also stands to be affected by this newfound tension. Recently, during a trip to the Middle East with Trump, Musk announced that Saudi Arabia had approved Starlink for aviation and maritime applications. Uncertainty looms over whether political influences have played a role in Starlink’s expansion, especially as other deals in Bangladesh, Pakistan, and India have emerged amid Trump’s foreign policy maneuvers.
SpaceX’s valuation underscores its success, recently reaching $350 billion during a private financing round, a significant increase from $210 billion just a year ago. The initial boost in Tesla shares during Trump’s presidency laid the groundwork for Musk’s ascension in the automotive market, with stock prices peaking following his election victory. However, Tesla struggled under Musk’s leadership of a government cost-cutting group, leading to diminished market perception. The shares have gained traction again, driven by Musk’s renewed focus on Tesla and anticipated launches of driverless taxis.
As the stakes rise, both Tesla and SpaceX navigate a complex political landscape that could have lasting implications for their innovations and partnerships. Investors and analysts alike are watching closely to see how this ongoing conflict will unfold and impact Musk’s ambitious plans for the future of transportation and space exploration.
Original Source: https://www.livemint.com/news/us-news/tesla-stock-tanks-14-loses-150-billion-in-market-value-amid-explosive-musk-trump-clash-11749160162711.html
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Publish Date: 2025-06-06 03:28:00
