Tesla (NASDAQ: TSLA) shares plunged on Thursday following a dramatic and public falling out between President Donald Trump and Tesla CEO Elon Musk, marking a sharp turn in what had been a close alliance.
The selloff came after Trump publicly criticized Musk and suggested he may terminate federal contracts and subsidies tied to Musk’s companies. The dispute centers on a Trump-backed spending bill, which Musk has strongly condemned. In response, Trump expressed disappointment in Musk, while Musk accused the former president of dishonesty.
Tesla’s stock ended the day down 14.3%, after falling as much as 18% during intraday trading.
From Allies to Adversaries
Tensions erupted after Musk lambasted the bill—referred to by Trump as his “big beautiful bill”—calling it a “disgusting abomination” due to the amount of what Musk described as political pork. Trump claimed Musk was only upset because the bill dropped an electric vehicle (EV) mandate, and implied that Musk had previously supported the bill before its final version.
“I’m very disappointed with Elon,” Trump told reporters. “He knew every detail of the bill. He had no issue—until we cut the EV mandate.”
Later, on his Truth Social platform, Trump said he had essentially cut ties with Musk, saying he had “asked Elon to leave” and that Musk “went crazy” afterward.
Trump also escalated the dispute by threatening to eliminate government support for Musk’s ventures:
“The easiest way to save Billions in the Budget is to cancel Elon’s subsidies and contracts,” Trump wrote. “I’m surprised Biden didn’t already do it!”
Musk Responds on X
Musk fired back on his own platform, X (formerly Twitter), denying Trump’s claims that his criticism was about the EV mandate.
“Whatever,” Musk wrote, “Keep the EV/solar cuts in the bill—even though oil & gas subsidies are untouched (very unfair!!)—but get rid of the MOUNTAIN of DISGUSTING PORK.”
In a sarcastic swipe, Musk added:
“In the history of civilization, no bill has ever been both big and beautiful. Everyone knows that. You either get a big and ugly bill or a slim and beautiful one. Slim and beautiful is the way.”
Musk then directly rebutted Trump’s claims, calling them “an obvious lie” and “so sad.” He also escalated the feud further by suggesting Trump may appear in unreleased Epstein files, posting, “Have a nice day, DJT!”
In a final jab, Musk stated that SpaceX would begin decommissioning its Dragon spacecraft, following Trump’s threat to pull government support.
