Introduction: Tesla Suffers Amid Trump-Musk Fallout
Tesla Inc. has faced a steep decline in 2025 following a highly publicized feud between Elon Musk and former President Donald Trump. The conflict has triggered sharp drops in Tesla's stock price, wiping out hundreds of billions in market valuation and significantly affecting Musk's personal wealth.
Stock Performance Overview
Since the beginning of 2025, Tesla has emerged as the worst-performing large-cap stock. The company's stock price has fallen by over 29%, resulting in a market capitalization loss exceeding $380 billion. This decline has pushed Tesla from being the eighth largest company globally by market cap to potentially falling out of the top 10.
Key Statistics:
- Tesla stock dropped more than 14% in one day following the public fallout, erasing around $152 billion in hours.
- Year-to-date market cap reduced by approximately 29.3%, lowering it to about $917 billion.
- Elon Musk’s personal net worth fell by nearly $9 billion amid the dispute.
Political Conflict and Its Impact on Tesla
Elon Musk's recent political ambitions and public antagonism toward Donald Trump have severely affected Tesla. The feud began as Musk criticized Trump's policies and escalated into a heated exchange of threats and insults between the two billionaires.
Previously, under Trump’s leadership, policies favored the oil industry and traditional petroleum vehicles, a stance that conflicted with the growing electric vehicle (EV) market Tesla represents. Trump's executive orders promoting fossil fuel extraction, combined with rhetoric favoring oil over clean energy, have dampened demand for EVs.
Legislative Challenges: The 'Big Beautiful Bill'
One of the major setbacks for Tesla was the passage of Trump's so-called "Big Beautiful Bill" by House Republicans. This bill removes tax incentives and subsidies for EV manufacturers. For Tesla, which has benefitted significantly from these tax breaks, this legislation threatens to cut tens of billions of dollars in financial benefits annually.
Additionally, Trump has threatened to eliminate government contracts and subsidies that benefit both Tesla and SpaceX, further pressuring Musk's businesses.
Public Exchange and Political Implications
During their public clash, Musk accused Trump of "ingratitude," pointing out that his financial and moral support during the previous presidential election was instrumental in Trump's electoral victory. Musk claimed to have invested hundreds of millions of dollars in the campaign and asserted that without him, the electoral landscape would have been different.
The disagreement escalated with Musk calling for Trump's impeachment and suggesting that political contender JD Vance should replace him, referencing alleged connections between Trump and controversial figures.
Conclusion: A Challenging Year Ahead for Tesla and Musk
The ongoing political dispute between Elon Musk and Donald Trump has created significant volatility for Tesla’s stock and Musk’s personal fortunes. Coupled with legislative changes unfavorable to the EV sector, Tesla's journey through 2025 remains fraught with uncertainty as the company grapples with external political dynamics impacting its valuation and future growth.
