June 6, 2025 — Tesla Inc. experienced its worst single-day market loss on Thursday, with shares plummeting by 14%, erasing over $152 billion in market value. The sharp decline dragged Tesla’s market capitalisation below the $1 trillion mark, closing at $916 billion—a historic one-day loss for the electric vehicle giant.
The sell-off followed a very public rift between Tesla CEO Elon Musk and U.S. President Donald Trump, which rattled investor confidence and added political uncertainty around the company’s future dealings with the federal government.
The dispute began after President Trump criticized Musk over his vocal opposition to the administration’s latest federal spending bill. In response, Trump threatened to cancel several government contracts linked to Musk’s businesses and accused the billionaire of overreacting.
“Elon was wearing thin. I asked him to leave, I took away his EV mandate that forced everyone to buy electric cars nobody wanted—which he knew I was going to do—and he just went crazy,” Trump posted on his Truth Social platform.
Earlier in the day, Trump told reporters from the Oval Office, “Elon and I had a great relationship. I don’t know if we will anymore. I was surprised.” He noted Musk seemed particularly frustrated by the removal of EV subsidies in the new budget package.
Musk responded on X (formerly Twitter) with a curt “Whatever,” as the president addressed the media. He followed up with a controversial post:
“Without me, Trump would have lost the election, Dems would control the House, and the Republicans would be 51–49 in the Senate.”
The spat comes at a time when Musk has adopted an increasingly political tone. He recently denounced the budget bill as a “disgusting abomination” and urged voters to support primary challengers against lawmakers who voted for it.
This marks a stark shift from Musk’s previous involvement with the Trump administration, where he headed the now-disbanded Department of Government Efficiency (DOGE). His term in that advisory role ended just last week.
Tesla stock had seen a 22% rise in May, despite weak sales figures. However, the fallout with Trump has accelerated a downward trend. The stock has fallen nearly 18% this week alone and is now down about 30% year-to-date, a steep drop from its December 18 peak of $488.54.
