On June 5, 2025, Tesla experienced its worst trading day in history, as shares plunged more than 14%, wiping out a staggering $150 billion in market value within hours. This dramatic collapse stemmed from a highly publicized and bitter feud between Tesla CEO Elon Musk and former US President Donald Trump. The fallout has not only shaken Tesla’s stock but also raised concerns about the future of Musk’s sprawling business empire, including SpaceX and emerging ventures.
The Spark: A Political and Personal Clash
The dispute ignited when Elon Musk publicly criticized the latest US government budget bill, describing it as a “disgusting abomination.” The bill notably removed several electric vehicle (EV) tax credits, a move that deeply upset Musk, who has heavily invested in Tesla’s EV vision.
In retaliation, Donald Trump took to his social media platform, Truth Social, to threaten terminating government contracts and subsidies linked to Musk’s companies. Trump stated:
“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 tension escalated further when Trump accused Musk of becoming “difficult to deal with” and claimed he had “asked him to leave” a special government efficiency role Musk held, highlighting the breakdown of their once cooperative relationship.
The Market Impact: Tesla’s Collapse and Broader Economic Effects
Tesla’s Stock Plunge
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Tesla shares dropped 14.26% to close at $284.70 per share.
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Over $150 billion in market value evaporated in a single day, bringing Tesla’s market capitalization below the $1 trillion mark to approximately $916 billion.
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This was Tesla’s worst single-day loss ever, reversing a 22% gain the stock had achieved earlier in May.
Broader Market Ripples
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The tech-heavy Nasdaq Composite index fell by 162 points (0.83%) amid the Tesla sell-off.
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The Dow Jones Industrial Average dropped 0.25%, closing at 42,319.74.
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The S&P 500 fell 0.53%, ending at 5,939.30.
These declines underscored investors’ anxiety over the growing political and regulatory uncertainties surrounding Musk’s businesses.
Musk’s Personal Wealth Takes a Hit
Elon Musk, the world’s richest man, saw his net worth shrink by nearly $34 billion in one day, according to the Bloomberg Billionaires Index. Despite the sharp decline, Musk remained atop the list with a net worth of approximately $335 billion as of June 6, 2025.
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Musk’s net worth has declined nearly $98 billion year-to-date.
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The drop largely reflects Tesla’s stock plunge but may also extend to other private ventures, including SpaceX, valued at $350 billion after a recent internal share sale.
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Musk’s AI and social media company, xAI Holdings, may also face uncertainties amid the feud.
The Fallout Beyond Tesla: SpaceX and Robotaxi Plans at Risk
SpaceX Contract Concerns
Trump’s threats extend beyond Tesla to SpaceX, Musk’s aerospace company, which relies heavily on federal contracts, including NASA missions to the Moon scheduled for next year.
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SpaceX’s Starlink satellite internet division recently secured operating rights in Saudi Arabia, Bangladesh, Pakistan, and India — deals that align with US diplomatic efforts.
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The feud raises questions about the future of these lucrative contracts and diplomatic ties.
Robotaxi Ambitions Under Threat
Tesla’s much-anticipated robotaxi launch, a key driver for future growth amid slowing traditional vehicle sales, now faces potential delays.
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Regulatory approval for robotaxis in 20 to 25 cities by next year could be jeopardized.
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Analysts warn a hostile political environment may impede Musk’s vision for autonomous vehicles.
The Public War of Words: From Allies to Adversaries
Musk and Trump’s relationship once seemed promising:
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Musk supported Trump’s presidential campaign, raising nearly $300 million.
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Both endorsed the slogan “Make America Great Again,” and Musk held a government efficiency role under Trump.
However, the recent exchanges revealed deep fissures:
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Trump accused Musk of “wearing thin” and claimed he asked Musk to leave his government post.
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Musk responded dismissively with “Whatever” and later escalated tensions by suggesting Trump’s name appears in unreleased Jeffrey Epstein investigation files.
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Musk threatened to decommission SpaceX’s Dragon spacecraft, a critical asset for NASA, before reversing the decision hours later.
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Trump’s press secretary called Musk’s remarks “an unfortunate episode” caused by his dissatisfaction with the budget bill.
The Unexpected Winner: A Crypto Meme Coin Surges Amid Chaos
Amid the public spat and Tesla’s stock crash, a surprising beneficiary emerged: a little-known cryptocurrency meme coin named “Kill Big Beautiful Bill” (KBBB).
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Launched on the platform Pump.fun, KBBB’s market value soared to over $53 million shortly after Musk shared a parody referencing Quentin Tarantino’s Kill Bill.
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Despite volatile swings, traders profited handsomely — one turning a $4,599 investment into nearly $60,000.
This illustrates how volatile public discourse among high-profile figures can influence even seemingly unrelated markets.
What Lies Ahead for Elon Musk and Tesla?
The bitter fallout between Elon Musk and Donald Trump has rattled investors, shaken confidence in Tesla’s near-term growth, and cast doubt on the political support that once buoyed Musk’s companies.
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Tesla’s stock is down nearly 18% over the past week and 30% year-to-date.
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Uncertainty looms over Musk’s robotaxi launch timeline and SpaceX’s crucial government contracts.
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The feud underscores how intertwined politics and business have become for high-profile entrepreneurs.
In the high-stakes world where the most powerful politician meets the richest entrepreneur, the consequences reverberate through markets, technology, and international relations. As Musk and Trump continue their public war of words, the future trajectory of Tesla and Musk’s empire hangs in delicate balance.
With inputs from agencies
Image Source: Multiple agencies
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