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The public fallout between Donald Trump and Elon Musk has resulted in investors losing their confidence in Tesla, with the Electric Vehicle maker witnessing $380 billion erosion in its market capitalisation. Tesla has corrected by over 29.3 per cent, making it the worst-performing large-cap stock of the year.
The political clash has added to Tesla's existing troubles, which include slowing electric vehicle demand and Musk’s controversial ties to far-right groups.
As a result, the company, which once ranked eighth globally in market value at the start of 2025, has now slipped to the tenth spot, as per Reuters report.
Since November 6, the stock has returned just 2.3%, compared to a 20% gain in the broader market over the same period—indicating growing investor unease.
Meanwhile, Apple has also faced a tough year, falling to the third most valuable company globally. The iPhone maker is currently valued at $2.99 trillion market cap after reflects a 20% drop this year due to slowing demand in China, AI challenges, and renewed trade tensions under the Trump administration.
Tesla Stocks Remain Volatile
Trump on Thursday claimed that Musk was upset because his massive tax legislation took the EV mandate away.
"Look, Elon and I had a great relationship. I don't know if we will any more," the president said.
"He said the most beautiful things about me. And he hasn't said bad about me personally. That'll be next. But I'm very disappointed.”
Trump’s comments extended a decline in Tesla shares.
On Thursday, Tesla lost over $150 billion in market value after its shares tanked 14 per cent - their biggest single-day loss on record — amid a public feud between Elon Musk and US President Donald Trump. The clash followed Musk’s sharp criticism of Trump’s tax-and-spending bill, which proposes ending the $7,500 EV subsidy by late 2025.
The selloff hit broader markets, including Destiny Tech100 Inc., which holds a significant SpaceX stake, falling 13%.
The Thursday crash partly erased earlier gains from Tesla's rollout of driverless "robotaxi" in Austin, Texas.
So far, Tesla shares have dropped 22%, making it the worst performer among the "Magnificent Seven" tech stocks, despite remaining the world’s most valuable automaker with a market cap of about $1 trillion.
A key figure in the Department of Government Efficiency's (DOGE) cost-cutting initiative for several months, Musk has blasted the bill, not long after he said he would spend less time in the White House and more time with his companies.
On his social media platform X, Musk has called on Congress members to kill the legislation, calling it a "disgusting abomination".
"It more than defeats all the cost savings achieved by the DOGE team at great personal cost and risk," Musk, the largest Republican donor in the 2024 election cycle, said on X on Tuesday.
