Elon Musk reacts during a press event with U.S. President Donald Trump (not pictured), at the White House in Washington, D.C., U.S., May 30, 2025.
Nathan Howard | Reuters
Shares of Tesla fell 14% on Thursday as President Donald Trump threatened to pull government contracts for CEO Elon Musk’s companies, escalating a war of words over the spending bill.
The move dropped the EV maker $152 billion in value, the biggest hit to its market cap ever, putting it below the $1 trillion benchmark and settling Thursday at $916 billion.
“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 wrote on Truth Social.
Trump spoke from the Oval Office earlier Thursday and said Musk was upset that EV credits were not included in the bill.
“Elon and I had a great relationship. I don’t know if we will anymore,” Trump said in the Oval Office on Thursday. “I was surprised.”
“Whatever,” Musk fired back as the president spoke.
“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” he posted on X.
Musk, the world’s richest man, in recent days has threatened to make lawmakers who vote for the bill face primary elections and called the bill a “disgusting abomination,” marking a significant shift in his comments about the administration.
The fall in shares comes after the EV maker saw a 22% rally in May despite weak sales numbers, with Musk wrapping up his time as head of Trump’s so-called Department of Government Efficiency, or DOGE.
Shares are down nearly 18% this week as Musk has continued to rail against the budget bill. This year, shares are down nearly 30% and well off the high of $488.54 reached Dec. 18.
Since Musk’s special government employee term ended Friday, he’s appeared at odds with the Trump administration and gone on a full assault against the president’s signature tax-cut bill.
“One of the things about Elon is when he goes all in, he goes all in,” Walter Isaacson, author of a Musk biography, told CNBC’s “Squawk Box” on Thursday.
“He is somebody who’s not exactly calibrated in these things and he is seriously upset,” Isaacson said.
Musk, who also runs SpaceX and xAI, posted a stream of attacks against the Trump bill on X Wednesday.
NBC News reported that Musk had tried to convince Trump and other GOP members of the administration to change aspects of Trump’s bill that would curtail EV and residential solar tax credits, which generate profits for Tesla.
The measure would also impose a new annual $250 fee on EV drivers.
Tesla 1-year stock chart.
Tesla is facing more fundamental problems, with plummeting sales of its electric vehicles in major markets in Europe and a declining brand reputation in the West.
Tesla is also under pressure to launch a long-delayed, driverless ride-hailing service this month in Austin, Texas.
Musk has said that Tesla is testing driverless vehicles in that market, but its primary competitor Waymo is already operating a major commercial robotaxi service there in partnership with Uber.
Isaacson said Thursday that Musk was also annoyed with members of the Trump administration who worked against the nomination of Jared Isaacman as head of space agency NASA.
“That, to Musk, was just infuriating because they were doing, they were going after Jared Isaacman … to get at Musk,” Isaacson said Thursday.
Isaacman’s nomination was pulled over the weekend.
Isaacman led two private spaceflights through Musk’s SpaceX, in 2021 and 2024, commanding crews on trips around the Earth. His payment tech company Shift4 said in financial filings that as of June 30, 2021, it had invested $27.5 million in SpaceX as well.
