Tesla’s $150 Billion Stock Shock: Why the Trump-Musk Power Struggle Is Sending Shockwaves Through Wall Street
Trump and Musk’s very public clash wiped over $150 billion from Tesla. Here’s why investors and the auto industry are watching with anxiety.
- $150 Billion evaporated from Tesla’s market value in under 48 hours
- 6% Stock Rebound by Friday afternoon after tensions cooled—temporarily
- $4 Trillion projected addition to the national debt from Trump’s tax plan
- Billion-Dollar Cuts in government waste led by Musk before his resignation
A dramatic week on Wall Street left Tesla investors reeling. On Thursday, a spectacular $150 billion was erased from Tesla’s value as the political rivalry between President Donald Trump and tech titan Elon Musk burst into the open—and the aftershocks are still being felt across the automotive and tech worlds.
The root? A social media barrage from Musk, who publicly denounced Trump’s new GOP-backed spending plan. The president fired back with stinging rebukes, fueling fears that one of the world’s most valuable car companies is now at the mercy of unpredictable politics.
For the first time, the stakes for Tesla and the electric vehicle industry have ballooned from boardrooms to the White House. Industry watchers warn that volatility could only just be beginning.
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Q&A: What Sparked the Trump-Musk Feud—and Why Does It Matter?
The trouble started when Musk, fresh off his stint leading the Department of Government Efficiency (DOGE), slammed Trump’s controversial tax and spending bill. Musk, who once championed the campaign that swept Trump into office, abruptly turned on the administration, citing the legislation’s projected trillions in deficit spending and its elimination of EV tax credits—a move that could devastate Tesla’s bottom line.
Within hours, sharp on-screen drama was spilling over into shareholder portfolios. Investors, spooked by the threat of vanishing government incentives for electric vehicles, rushed for the exits. Trump’s responses only intensified the market chaos, with sources inside Wall Street calling the wipeout historic.
How Could Trump’s Tax Plan Impact the Electric Car Market?
Trump’s tax bill, having cleared the House, is speeding toward the Senate with the president eager to sign it into law by July 4. The legislation packs a one-two punch for Tesla:
- EV Tax Credits Eliminated: Removing crucial incentives could slash Tesla’s U.S. sales and slow EV adoption nationwide.
- National Debt Balloons: Projected to pile on up to $4 trillion in debt over a decade, stoking further market uncertainty.
Industry analysts believe the end of EV credits could be the biggest existential threat Tesla has ever faced. Investors, already skittish after Musk’s public break with Trump, fear the company’s stratospheric valuation is built more on hype than hard financials.
Can Musk and Tesla Recover from This Political Punch?
After a historic plunge, Tesla shares rebounded 6% Friday as both Musk and Trump appeared to cool the rhetoric. But investment experts warn this could be a dead cat bounce; the political climate remains highly charged, and long-term threats to Tesla’s business model have not disappeared.
Notably, Musk’s departure from DOGE, where he had slashed billions in government waste, further distances Tesla from future policy influence—raising questions about how the automaker will navigate a challenging regulatory landscape.
How Should Investors React?
Veteran market strategists point to a hard truth: Tesla’s share price relies heavily on investor perception of Musk’s magic touch. If the relationship between Musk and government sours, the company’s premium valuation could come under severe pressure.
Until it’s clear what—if any—relief the Senate could provide for EV incentives, caution and vigilance are the name of the game.
What’s Next in the Trump-Musk Standoff?
As the bill heads for a high-stakes Senate showdown, automakers, tech investors, and climate advocates are bracing for more fireworks. With the July 4 deadline looming, Tesla’s future—and the fate of the American EV industry—hangs in the balance.
Get ahead of the chaos: Stay informed, review your investments, and prepare for policy twists that could reshape the auto market.
Tesla & Politics: Survival Checklist for 2025
- Track progress of Trump’s tax bill in the Senate
- Monitor updates from Tesla & Elon Musk on company strategy
- Review investment risk if tied to EV tax credits
- Follow major news outlets for breaking developments
- Consult a financial advisor for portfolio adjustments
