Elon Musk and Donald Trump’s Explosive Feud Sends Tesla Shares Tumbling, Shocks Wall Street in 2025
Tesla loses $151 billion in value as Musk and Trump clash over government contracts and mega-spending bill. What’s next for investors?
- $151B market value erased from Tesla in one day
- 14.3% drop—Tesla’s sharpest single-day fall since 2020
- $20B+ SpaceX federal contracts since 2008
- $2.4T+ deficit impact from new spending bill
Wall Street was thrown into chaos Thursday as Tesla shares went into freefall, triggered by a fierce and very public battle between Elon Musk and Donald Trump. The electric car giant’s stock tumbled as much as 18% before closing down 14.3%. This massive drop wiped out $151 billion in market value—a hit not seen since the 2020 crash.
After the closing bell, the sell-off only deepened. Investors watched in real time as Musk, now the world’s richest person, and the former president hurled insults and threats across social media. At stake? Tens of billions in federal contracts and the financial fate of Musk’s empire.
What Actually Caused Tesla’s Shares to Plummet?
The feud exploded after Musk slammed Trump’s controversial “big, beautiful bill,” a massive spending package racing through Congress ahead of July 4, 2025. Musk blasted the bill as a “disgusting abomination,” while Trump, posting to his Truth Social platform, suggested pulling billions in government contracts from all of Musk’s companies—including Tesla and SpaceX—to slash the federal budget.
Analysts say the prospect of Musk losing lucrative government deals sent “shivers down Tesla investors’ backs.” The sharp drop—a staggering $47.35 per share—marks Tesla’s worst day in almost five years.
Is Musk Really at Risk of Losing Federal Contracts?
SpaceX, Musk’s space venture, is especially vulnerable. The company has secured more than $20 billion in federal contracts since 2008, according to USA Today. While it’s rare for US administrations to suddenly yank such deals, Trump’s threat dialed up uncertainty for the entire Musk empire.
Tesla, SpaceX, and related ventures have all benefited from government support. This sudden policy firestorm puts investors on edge, especially as both leaders show no signs of backing down.
Could a New Political Party Emerge from Musk’s Frustration?
In a move that stunned followers, Musk pinned a poll to his X timeline, asking if it’s time to “create a new political party in America that actually represents the 80% in the middle.” As mainstream politics fracture and tech titans flex their influence, 2025 could bring seismic shifts to both Wall Street and Washington.
For now, investors, analysts, and political watchers are glued to every tweet and post, bracing for more shocks as the Musk vs. Trump saga unfolds.
How Can Investors Navigate the Tesla Turbulence?
With volatility high and political crossfire intensifying, experts at CNBC and Wall Street Journal recommend caution:
- Keep an eye on government contract news—these will directly affect Tesla and SpaceX.
- Diversify your holdings to hedge against sudden policy shifts.
- Monitor Musk and Trump statements—these now move markets in seconds.
Q&A: What Does This Mean for the Future of Tesla and US Tech?
Q: How significant is the risk to Tesla’s future?
A major government contract loss could affect Tesla’s R&D and market expansion. However, strong international sales and new models could buffer some damage.
Q: Are other tech giants at risk?
Absolutely. Today’s clash could set a precedent for how political power tussles impact federal contracts across Google, Apple, and Amazon.
Don’t miss out: Stay alert as the Musk vs. Trump power play threatens to reshape America’s tech and political landscape.
Action Steps Checklist:
- Track Tesla and SpaceX federal contract headlines daily
- Review your portfolio’s exposure to government-dependent tech firms
- Stay updated on US government spending bills and political developments
- Subscribe to business news from trusted sites like Bloomberg
