Tesla shares plunged on Thursday as an increasingly bitter spat between CEO Elon Musk and President Trump erupted in public, with Mr. Trump suggesting the federal government could strip Musk’s companies of their federal contracts.
Tesla’s stock tumbled by as much as 18% in intraday trading — the electric car maker’s sharpest selloff in almost five years — before regaining some ground to close down 14.3%, or $47.35. The drop wiped out about $151 billion in Tesla’s market value.
The shares resumed their decline in after-hours trading.
The plunge comes as Mr. Trump and Musk, the world’s richest person, traded barbs on social media on Thursday. Musk has ratcheted up his criticism of Mr. Trump’s “big, beautiful bill” tax and spending bill this week, calling it “a disgusting abomination” on Tuesday as Congress pushes to send the legislation to the president by July 4.
Musk has denounced the bill for its price tag, with the nonpartisan Congressional Budget Office forecasting yesterday that the legislation would increase annual budget deficits by a total of $2.4 trillion over the next decade.
Mr. Trump criticized Musk on Truth Social, his social media app, on Thursday, suggesting that one way the government could cut spending is to withdraw government contract from Musk’s companies.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Mr. Trump wrote on Thursday afternoon.
Some of Musk’s companies are reliant on federal contracts, including space exploration company SpaceX, which has received almost $20 billion in federal contracts since 2008, according to USA Today.
The public dispute between the two “is sending shivers down the backs of Tesla investors,” Wedbush tech analyst Dan Ives told CBS MoneyWatch.
“This has gone from a candlelight dinner bromance to a knife fight,” Ives added. “Neither Musk nor Trump are one to back off.”
Musk, meanwhile, also posted criticisms of Mr. Trump and Republican lawmakers on Thursday, pinning a post to his X timeline that asked, “Is it time to create a new political party in America that actually represents the 80% in the middle?”
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