In three hours on Thursday (June 5), shares of the electric vehicle maker, Tesla, dropped more than 14%. The stunning wipeout happened as Elon Musk and Donald Trump duked it out online with critiques over the president’s “big beautiful bill.”
Associated Press reports that Tesla investors dumped holdings amid the bitter war of words between Trump and the world’s richest man. By the end of the trading day, $150 billion of Tesla’s value was gone. That’s more than what it would take to buy all the shares of Starbucks and hundreds of other big publicly traded U.S. companies. In after-hours trading, Tesla shares rose 0.8%.
Things Got REAL BEEFY Between Donald Trump & Elon Musk
For the record, Donnie and Elon are beefing over the president’s budget bill. Musk has publicly called out the bill, saying it will plunge the U.S. into slavery debt that will land the U.S. in a recession sooner rather than later. He’s been calling Americans to contact their reps to kill the bill. Trump ultimately clapped back, saying Elon is mad about the tax cuts not being offered to electric vehicle makers. And things got messy. Musk said that Trump wouldn’t have gotten elected without his help. Trump implied he may turn the federal government against his companies, including Tesla and SpaceX. He accused him of being upset over electric vehicles not getting preference in the bill.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on his social messaging service Truth Social. “I was always surprised that Biden didn’t do it!”
While Elon warned of economic collapse with the bill, Trump stood by it on Truth Social. He claimed it’s one of the “greatest bills.” The president also said taxes will increase by 68% if it doesn’t pass, and things will be far worse than that.” Trump also claimed he didn’t’ make’ the mess, but he’s here to “fix it.”
Amid this, Musk fed conspiracy theories of Trump’s involvement with Jeffrey Epstein and his infamous files. Elon threatened to dismantle the SpaceX rocket that brought two stuck-in-space American astronauts home. He walked that threat back on Friday, though.
Tesla Is Down, But What Does That Mean?
After the November presidential election, investors rushed into Tesla stock, adding more than $450 billion to its value in a few weeks. The belief was that the company would see big riches as President Trump eased regulatory oversight of Tesla. Investors were also betting that Trump’s administration would embrace Musk’s plans for millions of driverless cars on U.S. roads.
Tesla shares hit an all-time high on Dec. 17, but they started to retreat during Elon Musk’s time as head of DOGE. While running the Department of Government Efficiency, his cost-cutting initiatives led to boycotts and a hit to Tesla’s reputation.
Also, the stock drop on Thursday partially reversed a big runup in the last eight weeks. Musk previously confirmed that Tesla would be testing an autonomous, driverless “robotaxi” service in Austin, Texas, this month. With the president and CEO beefing, investors fear Trump might not be in such a rush to push for self-driving cars in the U.S. If that happens, Tesla will feel the blow. AP reports that Tesla and electric cars are a struggling business, and pushing for driverless cars must be now, not later.
These concerns from investors translated into big paper losses in Tesla stock, which Musk personally owns, too. Per AP, he was down $20 billion for the day.
Elon’s Other Company, SpaceX, Is Also At Risk
Trump’s threat to cut government contracts seems more targeted at another of Musk’s businesses, SpaceX, than his car company.
Elon’s privately owned rocket company has been winning amid his amplified relationship with Trump in recent years. SpaceX has received billions of dollars for sending astronauts and cargo to the International Space Station, providing launches, and doing other work for NASA. The company is currently racing to develop a mega rocket for the space agency to send astronauts to the moon next year.
A subsidiary of SpaceX, the satellite internet company Starlink, appears to also have benefited from Musk’s once-close relationship with the president. On a trip with Trump to the Middle East last month, Musk announced that Saudi Arabia had approved Starlink for aviation and maritime use. Though it’s unclear, for now, how much politics has played a role. Another measure of SpaceX’s success: a private financing round. In recent months, a private sale of shares reportedly valued the company at $350 billion, up from an estimated $210 billion a year ago. Now, ALL that of this is possibly in danger.
AP Business Writer Bernard Condon contributed to this report via AP Newsroom.
The post Bye Billions? Tesla Stocks Take A Hit Amid Messy Feud Between Elon Musk & President Trump Over Spending Bill appeared first on The Shade Room.
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