Tesla CEO Elon Musk and U.S. President Donald Trump, once closely allied, are now publicly at odds, triggering major market volatility for Tesla.
This feud originated from Musk’s appearance via video link at the Qatar Economic Forum on May 20, 2025, where he declared a significant retreat from political funding:
“In terms of political spending, I’m going to do a lot less in the future.”
Previously a major donor to Trump’s campaigns, Musk’s announcement sparked widespread speculation about shifting alliances and the future relationship between Tesla and the U.S. administration, according to Geo News.
In early June 2025, the situation escalated dramatically, when Musk sharply criticized President Trump’s proposed $4 trillion spending bill, branding it a “disgusting abomination” and “economic suicide” on social media.
In retaliation, President Trump’s administration swiftly threatened to revoke Tesla’s federal subsidies and EV tax credits, crucial financial incentives for the company, according to Reuters, AP News.
Reacting to this high-profile clash, Tesla’s stock immediately fell by 14%, wiping approximately $150 billion off its market cap. Investors panicked, unsure of how federal policy shifts could impact the company’s future profitability and market position, as reported by Al Jazeera.
Adding fuel to the fire, Musk has publicly implied on social media that Trump’s name appears in the controversial Jeffrey Epstein documents, demanding Trump’s immediate impeachment. These remarks caused outrage and intensified the personal animosity between the two influential figures, citing New York Post.
Political Controversy and Global Reactions
Beyond financial impacts, the Musk-Trump conflict reignited protests at Tesla dealerships across the United States. Political opponents and supporters of Musk engaged in tense exchanges, underscoring how deeply politicized Musk’s business dealings have become.
Musk, who previously faced criticism for supporting Germany’s far-right AfD party, now faces global scrutiny again over his political involvement. Despite these challenges, Musk confidently stated:
“Tesla is built on innovation, not political favors. Let the market decide.”
Musk has also hinted at reassessing SpaceX’s critical partnerships with NASA if political interference continues, adding another layer of complexity to an already turbulent scenario.
As Musk distances himself politically and tensions with the Trump administration escalate, Tesla stands at a crucial crossroads. Whether Tesla can navigate this politically charged environment without permanent damage remains uncertain.
For now, the market and the world waits and watches closely.