In a clash that has sent ripples through Wall Street and Silicon Valley alike, former President Donald J. Trump and tech magnate Elon Musk have escalated a bitter public feud, triggering a steep sell-off in Tesla shares and casting uncertainty over the future of federal support for electric vehicles.
The spat, which began as a disagreement over energy policy, has since unraveled into a broader political and personal conflict — one that could have sweeping consequences for Tesla’s business prospects and for the evolving relationship between technology leaders and political powerbrokers.
“I think we’re watching the deterioration of one of the most consequential business-political alliances in modern history,” said Dr. Karen Mitchell, a political economist at the Brookings Institution. “Elon Musk and Donald Trump once symbolized the merging of entrepreneurial swagger and populist momentum. Now, their breakup could reverberate through policy and markets.”
The Spark That Lit the Fuse
The immediate catalyst for the dispute was Trump’s endorsement of a sweeping tax-and-energy reform proposal that would phase out federal subsidies for electric vehicles.
Musk, who has long advocated for public investment in green technology, condemned the bill as a “fiscal and environmental disaster” in a sharply worded post on X (formerly Twitter).
Trump, known for his unpredictable style and retaliatory instincts, responded by distancing himself from Musk and calling the billionaire “erratic” during a campaign rally in Arizona.
“Elon used to be great. I bought one of his cars. Not anymore. I don’t need a Tesla to win the White House,” Trump told supporters.
The backlash was swift. Tesla shares plunged more than 14% on Thursday, wiping out $150 billion in market capitalization — a staggering figure even for the world’s most valuable automaker.
Market Reaction and Investor Anxiety
Financial analysts attribute the dramatic selloff not just to the war of words, but to broader fears about political risk.
“Investors are spooked by the idea that federal contracts or regulatory support could evaporate overnight,” said Daniel Hofstra, an automotive analyst at Morgan Stanley.
“If a second Trump administration targets Musk’s companies, it’s not just Tesla that’s vulnerable — SpaceX, Starlink, and Neuralink could all be in the crosshairs.”
The White House has remained largely silent on the matter, fueling speculation about internal divisions and behind-the-scenes negotiations.
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Reports emerged late Friday that National Economic Council aides had reached out to Tesla executives in a bid to de-escalate tensions — though Musk has denied any contact.
Political Fallout and Musk’s Counterattack
On Friday morning, Musk fired back on X, suggesting Trump’s name might appear in yet-to-be-released documents tied to the Jeffrey Epstein investigation.
The post was swiftly criticized for lacking evidence, but it signaled Musk’s willingness to take the fight into darker, more personal territory.
“Making explosive claims without substantiation is reckless, especially given Musk’s reach,” said Nadine Wexler, a former DOJ communications advisor. “He risks undermining his own credibility and inviting legal scrutiny.”
Trump, meanwhile, has floated the idea of encouraging states to pursue antitrust investigations into Tesla’s business practices — a move some legal scholars have labeled retaliatory.
“This is a dangerous precedent,” said Prof. Maria Delgado of NYU Law. “Using public office or political influence to target private enterprises over personal grudges threatens the rule of law and economic stability.”
A Widening Divide in the Tech-Political Axis
The feud marks a notable turning point in the relationship between Big Tech and populist conservatism.
Once seen as ideological allies in their shared disdain for bureaucracy and regulation, Musk and Trump now embody the fractures within that coalition.
“It’s not just about egos,” said Professor Mitchell. “It’s about conflicting visions for America’s industrial future.
Trump wants to restore fossil fuels and old-school manufacturing; Musk wants to disrupt and digitize. They were always uneasy allies.”
The path forward remains uncertain. While Musk has hinted at a desire to “move past politics,” Trump has given no indication of backing down.
“Tesla will be fine without federal handouts,” Musk wrote Saturday morning. “We’re building the future — with or without Washington.”
Yet many in the investment and policy communities are less sanguine. “This isn’t just another tech feud,” said Hofstra. “It’s a real-time stress test of how fragile our public-private partnerships have become.”
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