Investors sold off Tesla shares on Thursday as tensions between CEO Elon Musk and US President Donald Trump flared.
Shares in the electric vehicle manufacturer fell 14%, wiping off around $150 billion in market value in one of the worst days in months.
The losses provided a glimpse of what Musk would be up against as he defies a White House known for utilising government authority against perceived enemies.
As the argument grew, Trump threatened to withhold government contracts from Musk’s companies, notably rocket firm SpaceX, which has contracts worth tens of billions of dollars with the government.
“Go ahead, make my day,” Musk fired back in response to the threat.
The dramatic shift in the two men’s relationship unfolded live on social media, rapidly escalating from policy disputes to personal attacks.
Analyst Dan Ives of Wedbush Securities, a long-time Tesla enthusiast, dubbed it “jaw dropping and a shock to the market”.
He said the battle has raised investor concerns about what it means for the company’s regulation, which is looking to expand self-driving and robots and had anticipated a more flexible regulatory approach under the Trump administration.
“This must start to be calmed down,” Mr Ives wrote in a note, adding that it “put a fly in the ointment of the Trump regulatory framework going forward”.
Musk’s entrance into politics has already been a tumultuous trip for Tesla shareholders.
Shares had risen last year on hopes that his association with Trump would boost the company.
However, investor sentiment deteriorated this year as Musk’s friendship with Trump and role in controversial government expenditure cuts proved a lightning rod, triggering anger and affecting sales, particularly in Europe.
Investors were also concerned that Musk, who had been lobbying for a record-breaking pay deal, was not fully committed to the company.
Last month, the chairman of Tesla’s board was obliged to publicly dispute a rumour that the business was looking for someone else to run it.
Musk’s announcement on an investor call that he would be stepping down from his post as Doge CEO sparked an increase in the stock. He officially quit the government at the end of last month.
Tesla, meanwhile, is once again embroiled in political controversy.
Musk’s criticism of a Trump-backed budget package ignited the disagreement.
Musk has attempted to organise opposition, claiming that it will add too much to the government’s debt. He has also criticised Trump’s tariffs, which he predicted on Thursday would trigger an economic downturn in the second half of the year.
Trump said Musk’s welcome at the White House was wearing thin, accusing him of being upset about the elimination of a tax credit for electric vehicles, which has been critical to Tesla’s sales in the United States.
The two men have also disagreed over Trump’s decision to withdraw his candidacy of Jared Isaacman, a Musk supporter, to lead NASA.
Thursday’s drop brought the business’s share price to its lowest level since May, wiping out gains gained on optimism that Musk would concentrate attention on the company.
Tesla shares are down 25% since the beginning of the year, but they are still up 60% over the last year.
Investors were taken aback as the two guys clashed.
“Can someone please take the phone away from him?” said investor Ross Gerber, who has expressed concerns about the influence of Musk’s politics on Tesla and reduced his stake. “Tesla is getting destroyed.”
