Tesla shares dropped 14% on Thursday, wiping out over $150 billion in market value. The stock has declined in four of the past five trading sessions.
The sharp fall in Tesla's share price came after a public disagreement between Tesla CEO Elon Musk and US President Donald Trump. The company’s market capitalisation fell below the $1 trillion mark and ended the day at $916 billion, its biggest single-day loss in value ever.
The dispute began after President Trump threatened to cancel government contracts linked to Musk’s businesses. He made the remarks in response to Musk’s criticism of the government’s spending bill. Trump said Musk had become difficult to deal with and accused him of overreacting.
“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump posted on Truth Social, his social media platform.
Earlier in the day, Trump said from the Oval Office, “Elon and I had a great relationship. I don’t know if we will anymore. I was surprised.” He added that Musk seemed upset about the lack of electric vehicle (EV) credits in the new bill.
Musk quickly responded on X (formerly Twitter), saying “Whatever,” as the president addressed the media. He also posted, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”
Musk has recently taken a stronger political stance. He called the new budget bill a “disgusting abomination” and said lawmakers who support it should face challengers in future elections.
This is a change in tone from when he was involved with the Trump government as the head of a group called the Department of Government Efficiency, or DOGE. His term in that special role ended last Friday.
Tesla shares had seen a 22% rise in May, even though the company reported weak sales numbers. But since the public clash between Musk and Trump began, the stock has lost nearly 18% this week alone. So far this year, Tesla shares are down nearly 30%, a sharp fall from the high of $488.54 seen on December 18.
Source: India Today