Karmactive Team
Tesla has become the worst-performing major stock of 2025, losing a staggering $380 billion in market value since January. The latest blow came after a public falling out between CEO Elon Musk and President Donald Trump sent shares plummeting.
On Thursday, Tesla’s stock crashed 14%, wiping out $150-$152 billion in a single day—the company’s biggest one-day loss ever. The selloff followed an explosive exchange between the former allies on social media.
The trouble began when Musk publicly criticized Trump’s proposed “One Big Beautiful Bill,” calling it a “disgusting abomination” on his X platform. The bill would end the $7,500 electric vehicle tax credit by late 2025, seven years earlier than planned.
Trump fired back on Truth Social, threatening to cut “Elon’s Governmental Subsidies and Contracts,” which he claimed were worth “billions and billions of dollars.” He also stated he had “asked him to leave” his advisory role in the administration.
Musk escalated the conflict by claiming credit for Trump’s election victory: “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate…Such ingratitude.” He later suggested Trump “should be impeached” and made unsubstantiated claims connecting Trump to the Jeffrey Epstein files.
Tesla’s market troubles extend beyond this political drama. The company was already struggling with a 20% drop in car sales during the first quarter of 2025, with profits down more than 70% from the previous year.
Since January, Tesla’s market value has fallen 29.3% to $917 billion. Once ranked eighth globally in market capitalization, the company has slipped to tenth place and risks dropping out of the top 10 entirely.
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“Given the inherent powers of the office of the presidency, I don’t see how this could be anything but negative for Tesla and Musk,” said Paul Stanley of Granite Bay Wealth Management, highlighting the increased political and reputational risks.
Despite the turmoil, some analysts remain optimistic. Dan Ives of Wedbush Securities called the stock “way oversold” and maintained that Tesla’s upcoming robotaxi launch on June 12 represents the “start of the autonomous vision and the next chapter of golden growth.”
“Musk needs Trump and Trump needs Musk for many reasons, and these two becoming friends again will be a huge relief for Tesla shares,” Ives noted, though he acknowledged investors are in for a “little white-knuckle period.”
Meanwhile, short sellers capitalized on Thursday’s crash, gaining nearly $4 billion—their second-largest single-day profit ever, according to market data.
The fallout has also affected Musk personally, with his wealth dropping by nearly $9 billion according to Bloomberg’s Billionaires Index.
Whether the two billionaires can repair their relationship remains uncertain. When asked about media reports of a scheduled call with Musk, Trump responded, “You mean the man who has lost his mind?” adding that he was “not particularly” interested in talking to him.
