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Trump and Musk suffer multi-billion-dollar losses due to the public feud between them

Both Tesla and Trump Media & Technology Group suffered steep stock market declines, causing multi-billion-dollar losses.

Tesla

A Tesla poster (File)Cordon Press.

Agustina Blanco
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Agustina Blanco

Published / Updated

3 minutes read

Elon Musk and Donald Trump's companies suffered multi-billion-dollar drops after their public spat. Both Tesla and Trump Media & Technology Group suffered sharp stock market declines, causing combined losses of $21 billion.

Following the cross attacks between the tycoon and the president, Tesla shares fell 14.3%, which, according to Axios, cost Musk about $20 billion. On the other hand, Trump Media & Technology Group's 8% drop had a negative balance of $202 million.

This was not the president's only financial blow. His official meme currency also experienced a 10% drop, potentially costing him around $900 million.

Watch Tesla’s shares drop 14% today as Elon Musk and President Trump’s simmering feud erupts 📉

The rout erased about $150 billion from the EV maker’s market value, the stock’s biggest decline since March 10 pic.twitter.com/NWKayqJpsT

Impact on Tesla and the market

The drop in Tesla shares on Thursday adds to a difficult week, with a cumulative loss of nearly 18% in stock value, after a 22% rally in May driven by Musk's departure from DOGE, according to CNBC reports.

This year, Tesla shares have fallen nearly 30%, far from their peak of $488.54 on Dec. 18, 2024.

Investors who had hoped for favorable policies for electric vehicles and autonomous cars under the Trump administration now fear that the break with Musk could lead Republicans in Congress not to prioritize these initiatives.

The elimination of tax credits for electric vehicles and clean energy in Trump's bill, which Musk called "a disgusting abomination," also threatens Tesla's interests.

A broken alliance

Musk and Trump, who were close political allies for months, have seen their relationship deteriorate rapidly. Musk invested more than $250 million in Republican campaigns to support Trump's re-election in 2024 and led the Department of Government Efficiency (DOGE), a Republican administration initiative focused on cutting federal spending.

However, the breaking point came with Musk's public criticism of Trump's "big, beautiful bill," a spending and tax-cutting proposal that Musk said would unacceptably increase the national debt and undermine the savings achieved by DOGE.

On Thursday, Musk stepped up his offensive by reposting older X messages from Trump, from before his presidency, that advocated for a balanced budget and opposed raising the debt ceiling.

Trump responded from the Oval Office, stating, "Elon and I had a great relationship. I don't know if we will anymore." This statement and a post on Truth Social where he threatened to "terminate" Musk's government contracts marked a turning point in their relationship.

TRUMP ON MUSK: "You saw a man who was very happy when he stood behind the Oval desk, even with a black eye. I said, 'do you want a little makeup?' He said, 'No, I don't think so,' which is interesting."

"Elon & I had a great relationship. I don't know if we will anymore." pic.twitter.com/77mWNYtBY2

SpaceX and NASA contracts

Trump's threat to cancel Musk's government contracts could significantly impact SpaceX, which has key contracts, such as a $4.46 billion one with NASA to develop a human landing system.

In response, Musk announced on X that SpaceX "will begin decommissioning its Dragon spacecraft immediately," which could further escalate the conflict.

In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately pic.twitter.com/NG9sijjkgW

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