Topline
Shares of Tesla dropped by more than 14% on Thursday as the relationship between Elon Musk and President Donald Trump’s appeared to unravel, with Musk launching attacks at the president on X and Trump suggesting to reporters at the White House criticism of his signature bill from the world’s wealthiest person amounts to “Trump derangement syndrome.”
Musk has called to “kill” Trump’s policy bill, criticizing the legislation as “massive, outrageous” … More
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Key Facts
Tesla’s stock fell 14.2% to $284.70 as trading closed Thursday, with losses accelerating following Trump’s comment.
It’s the 11th-worst single trading day for Tesla since the company went public in 2010, according to FactSet, even though the stock recovered some of its losses toward the end of the day, after being down more than 17% at times Thursday afternoon.
Through more than a dozen posts on X since Tuesday, Musk has referred to Trump’s policy bill as “massive, outrageous” and “pork-filled,” while adding, “shame on those who voted for it: you know you did wrong.”
Musk’s latest criticism of the bill Thursday targeted Trump for the first time, as Musk wrote “wise words” in response to a tweet from Trump in 2013, in which Trump said, “I cannot believe the Republicans are extending the debt ceiling—I am a Republican & I am embarrassed!”
Trump responded to Musk’s recent attacks, suggesting Thursday he and Musk “had a great relationship,” but “I don’t know if we will anymore.”
Crucial Quote
“The quickly deteriorating friendship and now ‘major beef’ between Musk and Trump is jaw dropping and a shock to the market, putting major fear for Tesla investors on what is ahead,” Wedbush analyst Dan Ives explained in a note to clients.
Big Number
$25.5 billion. That’s how much was cut from Musk’s fortune amid Tesla’s stock slide, bringing his net worth down to $389 billion, according to Forbes’ estimates.
Contra
Tesla’s stock jumped 22% in May, which came as Musk said he would leave the White House and committed to serving as Tesla’s chief executive for the next five years.
What To Watch For
Trump has called on Republican senators to approve his policy bill by a July 4 deadline set by Senate leadership.
Surprising Fact
A stock slide for Tesla also comes as sales for the automaker declined in the U.K., Germany, Italy and China in May. Tesla’s sales dropped more than 45% in the U.K., despite sales across the industry increasing by 28%.
Tangent
Tesla will launch a robotaxi service in Austin, Texas, in June, featuring some 20 self-driving Model Y vehicles. The service’s debut in Austin follows criticism about Tesla’s self-driving software and Musk’s failure to disclose detailed safety and technical data about Tesla’s technology. The National Highway Traffic Safety Administration has opened several investigations into Tesla’s Autopilot feature over nearly a decade, including recent probes into whether Tesla’s Full-Self Driving software is linked to two deaths. Musk has repeatedly said the software allows for “full autonomy” while in a vehicle, though he has said an active driver is still required.
Key Background
Musk’s attacks on Trump’s policy bill follow his monthslong stint in the White House leading the Department of Government Efficiency. Trump and Musk have said Musk’s departure happened on good terms, and that Musk would continue to be present as a Trump adviser. White House press secretary Karoline Leavitt said Trump “already knows” Musk’s stance on his bill, saying “it doesn’t change the president’s opinion.” Tesla’s stock declined in recent months as Musk appeared to increasingly focus on his role with the Trump administration, with some analysts criticizing him for spending “110%” of his time as head of the DOGE rather than leading Tesla. After Tesla’s first-quarter earnings report in April, Musk signaled he would be “allocating far more of my time” to Tesla, though he had yet to commit to exiting his government role.
Further Reading