Tensions are rising in U.S. politics, and the public fallout between President Donald Trump and tech billionaire Elon Musk has become a market-moving headline. The two high-profile figures have been trading public jabs, triggering sharp investor reactions. Tesla shares tumbled 14.3% on Thursday alone, closing at $284.68.
The rift escalated after Musk criticized Trump’s newly proposed tax reform, dubbed the “One Big Beautiful Bill.” Musk warned that the bill would worsen the national debt and threaten the U.S. economy, calling it unfair to taxpayers. He even urged Americans to oppose the legislation, which the Congressional Budget Office recently projected could add $2.4 trillion to the federal debt over the next decade—pushing the total close to $38.6 trillion.
Going further, Musk expressed support for Trump’s impeachment, marking a dramatic shift from prior alliance to open confrontation. Many speculate the tension stems from potential clauses in the bill that could scale back tax incentives for electric vehicles—directly affecting Tesla’s bottom line.
Trump fired back during a joint press conference with the Chancellor of Germany, accusing Musk of being ungrateful and reminding the public of past government support for his companies. He also hinted at possibly canceling government contracts with Tesla and called Musk “insane” on social media.
Musk responded quickly, labeling Trump a “hypocritical politician” and claiming, “If it weren’t for me, he wouldn’t even be back in the White House.” In a possible response to mounting political pressures, Musk’s aerospace firm SpaceX also announced plans to retire its Dragon fleet.
Markets reacted swiftly. At its lowest point, Tesla shares were down nearly 18% intraday, shedding over $80 billion in market cap in just one session. Investors appear worried that Tesla may lose key federal support. Long-time tech investor Ross Gerber didn’t mince words, stating, “This online battle is a disaster for Musk—it could even trigger shareholder lawsuits.”
Much of Tesla’s valuation surge in recent years has stemmed from close cooperation with the government, including EV credits and public infrastructure contracts. With that relationship in jeopardy, broader investor confidence is taking a direct hit.
Beyond the business implications, the feud adds fresh uncertainty to the political landscape. House Speaker Johnson suggested that this may reflect deeper policy divides rather than personal animosity. Reports indicate that Musk had previously clashed with top U.S. officials—including the Secretary of State and Treasury Secretary—during White House meetings earlier this year. As head of the “Government Efficiency Department,” Musk reportedly voiced sharp criticisms of existing policies.
Recently, Musk even hinted at launching a new political party and is reportedly considering national polling to gauge public sentiment—moves that could further shake up the already volatile U.S. political sphere.
Looking ahead, investors and policymakers alike will be watching closely. Will this conflict escalate into full-blown political warfare? Will Tesla lose access to federal support? And could Musk’s warnings of economic fallout come true? One thing is clear: this is no longer just a clash between public figures—it’s a financial and political turning point with real consequences.
