Tesla’s share price dropped sharply by more than 8% on Thursday. This happened after former US President Donald Trump publicly criticized Tesla CEO Elon Musk. The criticism came amid a growing public feud between the two over a new US tax bill affecting electric vehicle subsidies.
Despite the stock decline, Tesla remains the world’s most valuable car company. Investors, however, are worried about the strained relationship between Trump and Musk, fearing it could affect Musk’s vast business empire.
What Sparked the Feud?
Elon Musk, the world’s richest person and CEO of Tesla, has openly opposed the new tax bill on social media. He called the legislation a “disgusting abomination.” He urged members of Congress to reject the bill.
The bill is a key part of Trump’s political agenda. It focuses on tax cuts and government spending.
Trump expressed disappointment with Musk’s opposition. Speaking from the Oval Office, he said, “Elon and I had a great relationship. I don’t know if we will anymore.” Trump added that he had helped Musk in the past and expected loyalty in return.
Trump believes Musk’s opposition comes because the bill removes consumer tax credits for electric vehicles (EVs). These credits have helped Tesla sell cars at lower prices.
Musk disagrees. He says his main concern is the bill’s impact on the federal deficit. Musk believes the bill will increase the government debt, which he opposes strongly.
Musk’s Response to Trump
Musk quickly replied on his social media platform X. He called Trump’s claims false. Musk dismissed Trump’s idea that he was upset over losing EV tax credits with a short “Whatever.” He posted a video of Trump talking about Musk’s reaction.
This public exchange highlights a personal clash between the tech billionaire and the former president. It adds tension to an already heated political debate.
Recent Developments
This disagreement came soon after Musk ended his role as head of the Department of Government Efficiency (DOGE). DOGE is a government program focused on cost-cutting.
Trump held a farewell event for Musk in the Oval Office just days before the feud became public.
At the farewell, Musk appeared with a black eye, which he joked was caused by his son. Trump even offered makeup for Musk’s injury, showing a friendly side before their fallout.
Trump said he understood why Musk was upset about some political moves. For example, Musk supported a nominee for NASA who Trump later withdrew.
Wider Implications of the Feud
Trump’s tax and spending bill is central to his domestic policy. It could shape the 2026 midterm elections, especially for the Republican Party.
Musk’s strong criticism and call to “kill the bill” highlight worries about the growing federal deficit. His opposition also raises questions about the future of EV incentives in the US market.
The public fight between Musk and Trump shows how business leaders and political figures can clash. Their disagreements may influence important policies and market stability.
For more details on Tesla’s approach in India, especially its hesitation to start manufacturing and focus on showrooms, read here:
Tesla not keen on manufacturing in India due to lack of sales and showrooms