Trump, Musk in stunning live break-up – Tesla shares lose $252b in value – NZ Herald
Imagine waking up and finding $152 billion wiped out in a single day.
That’s exactly what happened to Tesla after a dramatic public spat between Elon Musk and President Donald Trump rocked investor confidence—and the stock market responded like a thunderclap.
Let’s break down what went wrong, why it matters, and what it could mean for the future of electric vehicles, government policy, and tech leadership.
What Sparked the Tesla Stock Crash?
On Thursday, June 5, shares of Tesla (TSLA) tumbled a jaw-dropping 14%, pushing its market capitalization down to $916 billion—a loss of $152 billion, the biggest single-day drop in the company’s history.
The trigger?
President Trump threatened to revoke federal contracts from Musk’s companies after a heated disagreement over the latest government spending bill, which excludes electric vehicle tax credits.
Elon Musk vs. Donald Trump: The Feud Goes Public
Trump didn’t hold back.
In a post on Truth Social, he wrote:
“Elon was wearing thin… I took away his EV Mandate… and he just went CRAZY!”
Meanwhile, Musk fired back on X (formerly Twitter):
“Without me, Trump would have lost the election… the Republicans would be 51-49 in the Senate.”
This back-and-forth isn’t just political drama—it has real economic consequences. Tesla’s investors reacted swiftly, signaling concern that the government’s pullback on EV incentives could hurt Tesla’s bottom line.
Why This Hit Was So Massive
Tesla had just wrapped up a 22% rally in May, even though EV sales were weakening.
Musk had recently finished a stint leading the Department of Government Efficiency (DOGE)—a Trump-led initiative. But once his term ended, so did the cordial relationship.
Here’s why the market is so rattled:
- Tesla relies heavily on federal support—especially for EV and solar energy tax breaks.
- The new bill proposes a $250 annual fee on EV drivers.
- It also threatens Tesla’s future government contracts and incentives.
The uncertainty is what’s hurting the stock.
Bigger Issues: Sales, Competition & Driverless Delays
Beyond the political tension, Tesla is facing serious operational challenges:
- EV sales are plummeting in Europe and North America.
- Brand reputation is slipping due to controversies.
- The long-promised driverless ride-hailing service in Austin, Texas, is still delayed.
- Competitor Waymo is already operating robotaxis in Austin—with Uber.
As one Tesla watcher put it:
“Tesla’s not just fighting politics—it’s fighting time and tech too.”
Musk’s Space Ambitions Take a Hit Too
It’s not just Tesla.
Musk’s SpaceX is feeling the fallout. Trump’s team reportedly blocked the nomination of Jared Isaacman—Musk’s trusted spaceflight commander—to lead NASA. Musk didn’t take it well.
Isaacman had led two private spaceflights with SpaceX and invested $27.5 million into the company. Insiders say his blocked nomination felt like a personal blow to Musk.
What This Means for the Future
This moment highlights a turning point:
- Investors are waking up to how closely Tesla’s success is tied to government policy.
- Musk’s political influence has limits—and public fights can backfire.
- The future of clean energy, automation, and even space travel may shift depending on who controls Washington.
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