Tensions between President Donald Trump and Tesla CEO Elon Musk have sent Tesla's stock into a nosedive.
According to Investing.com, the heart of the matter is a disagreement over a spending bill strongly endorsed by Trump, which Musk has publicly criticized, triggering a plunge in Tesla's stock value and incendiary public exchanges between the two formerly allied high-profile personalities.
Yesterday's stock market witnessed Tesla shares tumble by 14.3%, with an intraday low shedding up to 18% following Trump's harsh criticisms and threats to strip Musk's businesses of government contracts.
This marks a significant reversal of fortunes for Musk, who once enjoyed a friendly rapport with the President.
The root of this dispute lies in a spending bill that saw previous support from both parties. However, Trump and Musk's paths diverged when Musk called the bill a "disgusting abomination" for omitting an electric vehicle (EV) mandate, a move he opposed vehemently.
"I’m very disappointed with Elon," expressed Trump, noting Musk's prior understanding of the bill's details before his sudden reversal, which Trump considers personally motivated.
This dramatically exemplifies how quickly alliances can shift in the volatile intersection of business and politics.
Further exacerbating tensions, Trump took to Truth Social, stating: "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts." This threat underscores a dramatic escalation in their conflict, potentially impacting Musk's other ventures, including SpaceX.
In retaliation, Musk blasted the bill on his social platform X, criticizing the continued subsidies for oil and gas while cuts were projected for EV and solar incentives. He highlighted what he sees as the bill's hypocritical nature, loaded with "pork" — unnecessary provisions that don't serve the public interest.
Musk didn't stop there; he accused Trump of lying about the bill's provisions, leading to a sharp exchange of words. "Such an obvious lie. So sad," Musk countered on X, following Trump’s post.
The discord reached a new peak when Musk sarcastically wished Trump 'a nice day,' while also hinting at Trump's possible connections to Jeffrey Epstein, intensifying the public and personal nature of their spat.
Amid the ongoing turmoil, Musk made a shock announcement: "SpaceX will begin decommissioning its Dragon spacecraft immediately," in what appears to be a direct response to Trump’s threats to pull government contracts. This move signals a significant pivot in SpaceX's operations, potentially affecting U.S. space ambitions.
The heated exchange between Musk and Trump illustrates the intricate dance between politics and corporate interests, where personal grievances can spill over into public policy and economic ramifications.
As the dust settles, the financial markets and political analysts alike will be watching closely to see how these developments affect not only Tesla's stock but the broader landscape of governmental support for renewable technologies and space exploration.