Elon Musk’s personal fortune took a significant hit on Thursday, plummeting by $34 billion amid a public clash with former President Donald Trump, which also led to a substantial decline in Tesla’s market value. Shares of the electric vehicle manufacturer fell by 14.3% during the trading session, resulting in an approximate $150 billion reduction in the company’s market capitalization. Despite this staggering loss, Musk remains the world’s wealthiest individual, with an adjusted net worth of $334.5 billion, as per the Bloomberg Billionaires Index.
The turmoil began when Musk publicly condemned Trump’s proposed legislation, known as the “Big Beautiful Bill,” labeling it a “disgusting abomination” and urging Republican lawmakers to oppose it due to concerns over fiscal responsibility. “I’m sorry, but I just can’t stand it anymore,” Musk stated on his social media platform, X. He continued to express outrage at what he characterized as excessive congressional spending, asserting that those who supported the bill acted against their better judgment.
Trump’s response during a White House briefing reflected his visible disappointment with Musk’s stance. He insinuated that Musk’s criticism may stem from anxiety about potential cutbacks to electric vehicle tax incentives, a matter Trump suggested could affect Musk and his business interests. “Elon and I had a wonderful relationship. I’m not sure if that will remain,” Trump remarked, indicating a potential shift in their previously amicable rapport.
The former president later took to Truth Social, threatening to “terminate Elon’s Governmental Subsidies and Contracts,” a pointed reference to the billions of dollars in federal contracts held by Musk’s ventures, particularly his aerospace company, SpaceX. In reaction, Musk suggested on X that he had played a crucial role in Trump’s electoral success in 2024. He further accused Trump of having questionable associations with the disgraced financier Jeffrey Epstein, a claim that inflamed the already fractious situation. In a dramatic twist, Musk also threatened to retire SpaceX’s Dragon spacecraft but later retracted that statement.
What unfolded represents a significant deterioration in what was once a close alliance between Musk and Trump. Musk notably invested around $300 million to support Trump’s presidential aspirations and briefly assumed the role of head of the Department of Government Efficiency before resigning just days ago. This latest rift haunts the two figures, casting doubt on the future of their relationship and the impact it could have on Musk’s business ventures, which often thrive under favorable government policies.
The stark decline in Tesla’s stock was also notable for its heavy trading volume, with around 100 million shares changing hands. Despite the share price drop, Tesla’s market capitalization has stabilized around $1 trillion, maintaining its status as the world’s most valuable automaker even amidst these recent financial upheavals.
This situation highlights the volatility of wealth for high-profile billionaires like Musk and underscores the intertwined nature of business and politics in today’s climate. Musk’s current loss marks his second-largest single-day wealth decline on record. His most significant previously recorded drop occurred in November 2021, when he lost $50 billion following a Twitter poll regarding the sale of Tesla stock.
The evolving circumstances surrounding Musk and Trump indicate not only a personal rift but also a broader impact on financial markets and investor sentiment. Stakeholders within the electric vehicle sector and associated technologies may monitor this situation closely, particularly as relations between these influential figures can have repercussions for regulatory policies, market strategies, and consumer confidence in companies like Tesla and SpaceX.
As events continue to unfold, the responses from both Musk and Trump may shape not only their personal fortunes but also the broader dialogue concerning corporate governance, government contracts, and the role that prominent individuals play in influencing public policy. The latest developments serve as a reminder of how swiftly the landscape can shift in the intersection of politics and business, revealing the complex dynamics that underpin corporate America today.
Given Musk’s significant investments and influence, both his public commentary and the stock market’s response could indicate changing sentiments within the investment community regarding the sustainability of his business model under potential legislative shifts. Investors and market analysts alike will be keenly observing how Musk navigates these challenges moving forward and the broader implications for Tesla amidst a rapidly changing economic and political environment.