Trump-Musk Row Slams Tesla Shares $150 Billion in Market Value Wiped Out
On the threshold of “First Buddy” status with Trump, Elon Musk had this honor abruptly yanked away on Thursday, with Tesla shares crashing like a roller coaster, whilst the two titans clashed in public view.
Storms have threatened Musk’s life, and investors have yet to cling to the mast as if billions can simply vanish into thin air. Tesla lost 14%, $150 billion in market cap, the bonfire courtesy of drama and nothing else. The silence that followed the plunge was deafening, only adding to the unease over Musk’s empire.
Shares of Tesla got pulverized, with traders packing their bags, on the grounds of a very quick Twitter war between Elon Musk and President Trump. The catalyst? Musk intensified his disdain toward the tax bill after the President had given his initial reaction. Trump fired back, accusing Musk of having sour grapes about the bill having eliminated electric vehicle tax credits, and this marked the advent of market pandemonium, leaving Tesla stocks reeling.
What opposition can cause serious impediments in the Musk empire and thus create hurdles for Tesla. Imagine the U.S. Transportation Department, the very body holding the keys to Tesla’s driverless future, now with the possibility of being subjected to a presidential vendetta. Robotaxis without steering wheels? That dream hangs on regulators who may suddenly find reasons otherwise.”
The agency is also investigating Tesla’s driver-assistance software, known as “Full Self-Driving,” following a fatal crash.
The particular price of Tesla’s shares is being whipsawed with Musks’ political pronouncements. From being cozy with Trump while alienating potential Democratic investors to now going to war with the former president, the moves of Musk are shaking Wall Street. “He’s playing a dangerous game,” warns Dennis Dick, chief strategist at Stock Trader Network and a Tesla shareholder, “and shareholders are paying the price.”
Tesla’s EV sales are stalling, with Musk veering the firm’s future toward robotaxis. In 2022, he challenged investors to give up their Tesla shares if they doubted the driverless dream, staking everything on autonomous tech. Wedbush analysts anticipate an AI-powered goldmine worth trillions that might revolutionize the valuation of Tesla.
Musk has advocated for one federal approval process for autonomous vehicles to streamline the current maze of different state regulations.
Ross Gerber, the outspoken CEO of Gerber Kawasaki Wealth and Investment Management, a major Tesla investor, fears the escalating Trump feud could throw a wrench into Tesla’s gears. He warns that the animosity risks triggering unfavorable regulations and opening the door to a barrage of government investigations, ultimately hindering Tesla’s progress.
“Every benefit that was perceived he would have got now turns into a negative,” Gerber said.
Meanwhile on the other side that is the newly crowed tech titan and self-proclaimed chief cost-cutter of the DOGE project, Mr. Elon Musk has put Twitter into a storm by blasting the spending bill of President Trump, calling it sarcastically a “big beautiful bill.” It is as though the richest man in the world could only think about projects other than the Oval Office. Thus the market let out a loud “Aww!” on Thursday, as $27 billion (a staggering Rs. 2,31,557 crore) were sliced away from Musk’s coffers. Now that we are at it, the man is worth nothing but $388 billion (Rs. 33,27,310 crore), according to Forbes. Is this just a hiccup or the beginning of a billionaire slap fight?
There might be a big budgetary bonanza for Mr. Trump to announce, again firing across the bow: “To terminate Elon’s governmental gravy train! Billions upon billions saved!” An eruption in Truth Social, indeed would be fitting!
Secretary Duffy, by virtue of having yet put regulatory exemptions for autonomous vehicles in place, fast-track the driverless revolution. Buckle up because NHTSA, in April, indicated that it is working on a whole new rulebook for self-driving cars-a framework that could either provide a clean runway for innovation or another highway to unforeseen consequences.
While Washington nudges autonomous driving forward, Morningstar’s Seth Goldstein warns of a potential detour: regulations that might uniquely target Tesla.
While almost all manufacturers of autonomous vehicles equip their models with a radar and lidar, Tesla boldly pilots against seas of opposition, using only cameras to navigate the roads.
Goldstein wondered if federal regulators may require lidar, and consequently hurt Tesla. He added a Trump-esque nuance: “Crossing Trump could mean facing personal vendettas.” While aware of the risk, Goldstein dismissed it because for years the industry had been lobbying for stricter regulations.
Tesla stock: a wild roller coaster fueled by tweets and turbulence. Musk’s mid-July 2024 endorsement of Trump sent a meteor-like rise of 169% until mid-December; then practically the road eroded from beneath! Rage-Gang “Tesla Takedown” protests had the stock plunging by 54%, come early-April. The causes? Musk’s embracing DOGE and that political stance kept the buyers out in essential markets. European sales waned. China took a hit. Even California, the state’s backyard, turned sour.
From the House perspective, the budget blueprint under Trump ensures that the $7,500 electric vehicle tax credit will stop being available, with a phase-out period set to exhaust the credit by the end of 2025. Now, in the past, the tax credit has been said to be this important incentive, with a lure value of nearly Rs. 6.43 lakh, to increase demand for Tesla and its counterparts. But wait, wasn’t Trump in his transition days promising to do away with this very subsidy? The road to EV adoption might have just received a bump or two.
California’s Golden EV Dream Could Cost Tesla Billions.
Analysts from J.P. Morgan hypothesize a profit-wise setback of $1.2 billion for Tesla and a further disastrous $2 billion diminution in their regulatory credit sales. The perpetrator: Senate legislation purposely aimed at California’s ambitious electric vehicle sales mandates. So, would an all-electric future have its share of potholes laid on by the EV giant?
Rather than being stuck in park, Tesla continues to cruise. Meanwhile, Tesla remains the heavyweight champion of the automotive world, with a sway market cap of around $1 trillion: almost three times that of Toyota at $290 billion.
Early on, Tesla received favorable winds of politics, a good breeze at the back of Elon Musk. According to Steve Sosnick, chief strategist of Interactive Brokers, those winds have now changed and have turned into stiff headwinds that threaten to buffet the electric vehicle giant.
Tesla trades at 150 times profit estimates, a steep premium to other Big Tech stocks such as Nvidia.
Bob Doll, the chief investment strategist at Crossmark Global Investments, offered this colorful expression of disbelief: “Tesla? I’m skeptical.” “The darling of electric vehicles is an enigma. Its valuation is in the stratosphere, away from earthly fundamentals. The hype machine is working double-time right now; I want to lend my voice against it: I’m short.”
© Thomson Reuters 2025
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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