Tesla (TSLA) stock extended a two-day slide on Thursday as the very public fallout between its CEO Elon Musk and President Trump escalated, and Trump threatened to slash government contracts and subsidies key to Musk’s businesses.
“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!” Trump wrote on Truth Social.
Tesla stock fell to session lows on Thursday afternoon as the two traded barbs, falling as much as 13.3% near 3 p.m. ET.
Earlier in the day, Trump tore into Musk from the Oval Office after days of the Tesla CEO’s public protests against Trump’s giant tax bill working its way through Congress.
“I’m very disappointed, because Elon knew the inner workings of this bill better than almost anybody sitting here, better than you people,” Trump said to reporters in the Oval Office on Thursday. “All of a sudden he had a problem, and he only developed the problem when he found out that we’re going to have to have to cut the EV mandate.”
“Elon and I had a great relationship. I don’t know if we will anymore. I was surprised,” Trump added.
Musk posted on X, the social media platform he owns, in apparent response to Trump’s comments: “Whatever.” He continued aiming at the president and the bill in a subsequent barrage of posts over several hours.
Trump’s comments amounted to an extraordinary public rebuke of Musk, who went from Trump booster and Republican Party megadonor during the 2024 campaign, to the head of the Trump-created Department of Government Efficiency (DOGE) with a stated mission to cut spending.
Musk kicked off the complaints over the bill earlier this week, calling it a “disgusting abomination” on Tuesday. The billionaire ramped up his barbs on Wednesday, telling users on X to, “Call your Senator, Call your Congressman, Bankrupting America is NOT ok! KILL the BILL.”
The Wall Street Journal also reported that the strain between the two was amplified by the White House’s move to nix the nomination of Jared Isaacman for NASA administrator. Musk, a close ally of Isaacman, had advocated for him to get the job, sources told the Journal.
The bill faces an uncertain future in the Senate, with a Congressional Budget Office estimation of its impact on the deficit adding fuel to Musk’s line of argument.
The nonpartisan office projected the House-passed version of the bill would add $2.4 trillion to deficits over the next 10 years.
DOGE itself, once led by Musk, has been criticized for not producing the budgetary cuts Musk touted it could find — and the cuts it has produced have been deeply unpopular.
Musk’s ties to the Trump administration had been seen as a boon for his broader business interests, given SpaceX’s close work with NASA and regulatory levers the National Highway Traffic Safety Administration could pull in getting autonomous driving rules in place for Tesla’s robotaxi testing.
But demand weakness in the EU and recent protests at US Tesla showrooms have followed Musk’s controversial foray into politics, causing some Tesla owners to become alienated by Musk, specifically by his right-leaning tendencies, DOGE, and outward support of President Trump.
Tesla’s big robotaxi test is slated for June 12 in Austin. Much of the company’s value is tied to whether it can fully unlock autonomous driving for robotaxi purposes and individual owners.
Meanwhile, Alphabet’s (GOOG, GOOGL) Waymo continues to plow ahead and is essentially the leader in the space, accumulating 250,000 robotaxi trips per week.
By Agencies
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