A public fallout between U.S. President Donald Trump and billionaire entrepreneur Elon Musk has led to significant financial repercussions for Tesla and raised broader concerns among investors.
The dispute intensified on Thursday, June 5, after Musk publicly criticised President Trump’s “One Big Beautiful Bill,” a major tax and spending initiative projected by the Congressional Budget Office (CBO) to add $2.4 trillion to the federal deficit over the next decade.
Musk, who had recently stepped down from his role as head of the Department of Government Efficiency (DOGE), retorted on his X handle (formerly Twitter), criticising the bill while noting that he he had not seen the bill prior to its release.
Musk voiced concerns that the bill could exacerbate the national debt, which stands at approximately $36.2 trillion, and potentially push the country into a recession.
He wrote, “Trump tariffs will cause a recession in the second half of this year.”
In response, President Trump took to his TruthSocial platform to denounce Musk, threatening to terminate all government contracts and subsidies linked to Musk’s companies, including Tesla and SpaceX.
He posted, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
The feud has had immediate financial implications. Tesla’s stock experienced a sharp decline, falling 14 per cent on Thursday, marking one of its worst single-day performances.
The clash between President Trump and Musk, both influential figures in American politics and business, has triggered concerns among investors about the stability of government-business relations.
The situation may also impact ongoing government deals with Musk-led ventures, including Tesla and SpaceX, as the administration considers reevaluating contracts and subsidies associated with these companies, analysts at the Economic Times wrote.
The situation may also impact ongoing government deals with Musk-led ventures, including Tesla and SpaceX, analysts at the Economic Times wrote.
Trump’s sweeping tariffs war on the economies and businesses across the world has been generating global criticism and retaliation against the country, The ICIR has spotlighted this in several reports.
Reports indicates that tesla stock is making a rebound following comments suggesting reconciliation.