Trump-Musk Open War: Tesla Loses $150 Billion in a Day

The explosive consequences of the conflict between the American president and the Tesla CEO for financial markets

The spectacular collapse of a political-financial bromance

The relationship between Donald Trump and Elon Musk has taken a dramatic turn that is shaking up Wall Street. In just a few hours on Thursday, June 5, 2025, what was recently described as a "bromance" has turned into open warfare, sparking a tsunami across financial markets.

Tesla lost $150 billion in market capitalization in just one session, plummeting 14.3%—its worst performance in nearly five years. This tumble perfectly illustrates how political tensions can instantly translate into massive losses for investors.

Timeline of a foretold breakup

The trigger: Criticism of the "One Big Beautiful Bill"

It all began when Musk called Trump’s tax bill a "disgusting abomination". The legislation, known as the "One Big Beautiful Bill Act", notably includes:

The extension of 2017’s tax cuts
The gradual phase-out of tax credits for electric vehicles
An estimated $3.8 trillion increase in the deficit over ten years

The escalation: Threats and accusations

Trump’s response was swift. The president publicly said he was "very disappointed" in Musk before posting on Truth Social: "The easiest way to save billions in our budget is to end Elon’s government subsidies and contracts."

Musk hit back fiercely, stating: "Without me, Trump would have lost the election" and accusing the president of "ingratitude". The peak of this war of words was reached when Musk accused Trump, without evidence, of being involved in the "Epstein files".

Immediate impact on financial markets

Tesla: A historic free fall

Tesla’s stock suffered its biggest single-day drop ever:

-14.3% at Thursday’s close
$150 billion in market value wiped out
Fell below the symbolic $1 trillion mark
Exceptionally high trading volume

Sector-wide repercussions

The shockwave extended beyond Tesla:

Trump Media & Technology Group: -8.04%
Nasdaq: -0.8%
Electric vehicle sector under pressure
Uncertainty over SpaceX contracts (worth $22 billion)

Analysis of economic and financial stakes

For Tesla: Multiple challenges

Increased regulatory risks:

Tighter regulations on autonomous driving possible
Potential government investigations into "Full Self-Driving"
Removal of tax advantages for electric vehicles

Business impact:

Already observed boycotts from Democratic consumers
Risk of backlash from Trump supporters
Pressure on already declining sales in Europe and China

For SpaceX: Contracts in jeopardy

Though not publicly listed, SpaceX faces major risks with over $20 billion in government contracts on the line. Musk has also announced the dismantling of Dragon capsules in response to Trump’s threats.

Implications for investors

Investment strategies to reconsider

For Tesla holders:

Reassess the “Elon Musk premium” estimated at $150-$200 per share
Stay alert to political developments
Watch the results of the robotaxi program in Austin

For the tech sector:

Illustrates the political risks in tech investments
Importance of geographic and sector diversification
Increased scrutiny of “politically exposed” CEOs

Opportunities and risks

Potential opportunities:

Attractive entry price on Tesla for long-term investors
Possible future reconciliation between the two men
Continued innovation in electric and autonomous technology

Major risks:

Escalation of the political conflict
Loss of Musk’s regulatory influence
Impact on the Tesla brand

Macroeconomic perspective

Impact on US economic policy

This conflict raises crucial questions:

Coherence of American industrial policy
Role of private companies in government programs
Influence of social media on financial markets

International consequences

Opportunity for European and Chinese automakers
Questions around the stability of US public-private partnerships
Possible redirection of investments to other markets

Conclusion: A lesson in political risk

The Trump-Musk conflict is a textbook case of the impact of political tensions on financial markets. In under 24 hours, $150 billion evaporated, a brutal reminder that even the biggest companies aren’t immune to political turmoil.

For investors and traders, this situation highlights the crucial importance of:

Accounting for political risk in their analysis
Not underestimating the impact of social media on prices
Maintaining appropriate diversification
Constantly monitoring political warning signals

The era when markets moved independently of the political sphere is over. In this new paradigm, successful trading requires a deep understanding of the interplay between political power and financial performance.