American company Tesla is facing one of the darkest periods in its stock market history.
Since the beginning of 2025, the electric vehicle giant has seen nearly $380 billion wiped from its market capitalization, dropping from $1.3 trillion in January to $950.63 billion as of June 6—a staggering 29.3% decline in just five months.
It marks the worst annual drop so far among the world’s largest companies.
This dramatic loss comes amid a very public and direct clash between Tesla’s high-profile CEO Elon Musk and former U.S. President Donald Trump, who has once again become a central figure on the American political stage.
A Feud with Major Market Fallout
The sell-off accelerated following a heated exchange between the two men.
Musk harshly criticized Trump’s new budget bill proposal—dubbed “the great and magnificent plan”—which includes eliminating tax incentives for electric vehicles, a sector critical to Tesla’s business.
In a stinging response, Trump threatened to cancel public contracts with Musk’s companies, including SpaceX, triggering immediate panic among investors.
The result: Tesla’s stock plunged 14% in a single trading session, erasing $152 billion in market value—a historic record for the company.
In a sharply worded post on X (formerly Twitter), Musk slammed Trump’s plan as a “budgetary monstrosity,” warning it could worsen the U.S. deficit by $2.5 trillion over the next decade.
Trump fired back by calling Musk a “dangerous lunatic,” and even announced he would part ways with his own Tesla vehicle.
A Blow to Musk’s Wealth and Tesla’s Strategy
The war of words had a direct impact on Musk’s personal fortune, which dropped by $34 billion in a single day. Nevertheless, he remains at the top of the global wealth rankings, with a net worth of $334.5 billion.
Beyond the political dispute, Tesla is also grappling with structural headwinds: a global slowdown in demand for electric vehicles, intensified competition from emerging players in China and the U.S., and a significant drop in European sales.
Quarterly results released at the end of April revealed a 71% plunge in profits, further deepening concerns over the company’s financial health.
Still a Strategic Market Player
Despite the sharp downturn, Tesla remains the world’s 11th most valuable company by market capitalization—a testament to its enduring weight in the global financial ecosystem.
Yet analysts warn that a prolonged Musk–Trump conflict could spill over into the broader market, given Tesla’s influence on major stock indices.
Some predict a 5–10% correction in U.S. markets could occur if tensions are not quickly defused, especially since Tesla is heavily represented in retail investor portfolios.
A Crisis Exposing the Vulnerabilities of Tech Capitalism
This episode underscores the acute sensitivity of large corporations to political upheaval—particularly those that rely on fiscal or regulatory support.
Tesla, long a pioneer in clean energy and technological innovation, now appears vulnerable to high-level political decision-making.
As the U.S. presidential election approaches, Tesla’s future seems tied not only to its industrial performance but also to the outcome of a power struggle between two towering figures in American life: the unpredictable tycoon and the former president seeking a comeback.
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