Shares of Tesla Motors plummeted on June 5 as the feud between Elon Musk and President Donald Trump intensified.
The electric vehicle maker’s stock fell 14.26 percent, or $47.35, to $284.70. Shares added to their losses in after-hours trading, sliding more than 2 percent.
While Tesla has rebounded since its April low, the stock is still down about 25 percent this year and remains far below its December high of $488.54.
The spat between Trump and Musk began when Musk became highly critical of the One Big Beautiful Bill Act, a tax-and-spend legislation recently passed by the House of Representatives, calling it a “disgusting abomination” and urging lawmakers to “kill the bill.”
Echoing estimates from the Congressional Budget Office and the Joint Committee on Taxation, Musk is concerned that the bill will increase debt and deficits, which the Department of Government Efficiency (DOGE) has been trying to alleviate by recommending federal spending reductions.
Before leaving the White House in late May due to the end of his 130-day tenure as a special government employee, Musk was the leader of DOGE, a cost-cutting advisory agency created by Trump in January to identify fraud, waste, and abuse in federal agencies.
In a recent exchange with Sen. Mike Lee (R-Utah), Musk pointed out that annual interest payments exceed $1 trillion. “This is debt slavery for the American People,” he said.
Trump and senior administration officials say it will reduce the deficit as it contains approximately $1.7 trillion in mandatory savings over the next decade.
“The One Big Beautiful Bill’s $1.7 trillion savings are permanent changes to the law — meaning these savings will continue long into the future,” the White House said in a recent fact sheet.
The disagreement over the bill escalated on June 5, with the two publicly trading criticisms throughout the day.
“Elon and I had a great relationship. I don’t know if we will anymore,” Trump said alongside German Chancellor Friedrich Merz in the Oval Office, in response to a question from the press. “I was surprised.”
Trump told reporters that he believes Musk became upset because EV tax credits were not included in the One Big Beautiful Bill. As far back as 2021, Musk expressed support for abolishing all subsidies, including those for electric vehicles, such as tax credits.
Later in the day, Trump, writing on Truth Social, threatened to eliminate Musk’s “governmental subsidies and contracts” to save the federal government billions of dollars.
The Tesla and SpaceX CEO responded on the social media platform X that “Trump would have lost the election” without his help.
The world’s richest man later noted, shortly after Trump threatened to cancel his contracts, that SpaceX would start decommissioning its Dragon spacecraft.
He also said he expects a recession in the second half of the year because of the president’s global tariffs.
Trump, in a June 5 Truth Social post, again encouraged lawmakers to pass the bill as it “puts our country on a path of greatness.”
What’s Next for Tesla
The escalation has market watchers on standby.
Dan Ives, a tech analyst at Wedbush, fears that the Musk-Trump battle will “change the regulatory environment for Tesla,” particularly in the autonomous sphere.
“The quickly deteriorating friendship and now ’major beef’ between Musk and Trump is jaw-dropping and a shock to the market and putting major fear for Tesla investors on what is ahead,” Ives said in a note posted on the social media platform X.
Despite the selloff of Tesla shares, market analysts have signaled optimism surrounding the company’s prospects, particularly battery megapacks and Optimus robots.
Nancy Tengler, the CEO and CIO for Laffer Tengler Investments, recently stated that Tesla shares are trading on a narrative, “and we buy the long-term story.”
“There will be thousands of Optimus robots working in Tesla factories by the end of the year, and Musk expects to scale quickly. He is confident the company can get to a 1 million robot run rate within five years,” she said in a note emailed to The Epoch Times.
According to Marketbeat, the stock currently enjoys 21 “Buy” ratings, and the 12-month share price has a 3 percent upside of nearly $294.
“This feud does not change our bullish view of Tesla,” Ives said.
“It’s another Twilight Zone moment in this Musk/Trump relationship.”
The U.S. stock market finished the June 5 trading session in the red.
The blue-chip Dow Jones Industrial Average shed 108 points, or 0.25 percent, to 42,319. The tech-heavy Nasdaq Composite Index tumbled 162 points, or 0.83 percent, to 19,298. The broader S&P 500 dropped 31 points, or 0.53 percent.
If you found this article interesting, please consider supporting traditional journalism
Our first edition was published 25 years ago from a basement in Atlanta. Today, The Epoch Times brings fact-based, award-winning journalism to millions of Americans.
Our journalists have been threatened, arrested, and assaulted, but our commitment to independent journalism has never wavered. This year marks our 25th year of independent reporting, free from corporate and political influence.
That’s why you’re invited to a limited-time introductory offer — just $1 per week — so you can join millions already celebrating independent news.