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Tesla’s $380 Billion Wipeout: The Trump-Musk Feud That Shook Markets

The year 2025 has experienced its share of financial crisis, but perhaps few have been as sensational as Tesla's mind-boggling $380 billion market value drop. The electric car behemoth, once a stock market behemoth, has now risen to be the year's worst-performing large-cap stock. What sparked it? A fiery public exchange between Elon Musk and U.S. President Donald Trump, which shook Wall Street to its core.

Tesla

The Fallout Begins

Musk and Trump's unlikely partnership fell apart when Musk came out publicly against Trump's tax-and-spending bill on Twitter. The bill called for the elimination of the $7,500 EV subsidy, something that Musk perceived as an outright assault on Tesla's future. Trump responded by attacking back, vowing to withhold government contracts from Tesla and SpaceX. This political confrontation fueled Tesla's already beleaguered woes, such as declining EV demand and Musk's heated associations with far-right elements.

Tesla Fallout

The Market Response

Tesla shares plummeted 14% in one day, erasing $150 billion in market value—its largest single-day decline ever. Investors panicked, triggering a wider selloff among other tech stocks, such as Destiny Tech100 Inc., which has a considerable SpaceX stake. Short sellers cashed in on the mayhem, making a profit of almost $4 billion from Tesla's implosion.

Tesla Market

Political Drama Escalates

While Tesla stock continued to plummet, the White House allegedly organized a phone call with Musk to calm the situation. But Trump shut it down, saying, "You mean the man who has lost his mind?" and explaining that he was "not particularly" keen on speaking with Musk. The spat continued to rise when Musk resigned from his position in the Trump administration, something that at first appeared to be friendly but immediately became bitter.

Trump vs Musk

Tesla's Future: Can It Recover?

In spite of a modest bounce in Tesla stock, the harm seems to be lasting. The firm, which began the year as the eighth most valuable company in the world, has tumbled to tenth position. Apple, in the meantime, has also had a difficult year, falling to the third most valuable company as a result of dampened demand in China and AI issues.


Tesla's robotaxi launch in Austin, Texas, designed to restore investor confidence, is being overshadowed by the political instability that continues to rock the company. With increasing regulatory risks and the erratic style of Musk, experts are not optimistic about Tesla's prospects for revival.


Final Thoughts

The Trump-Musk beef is not only costing Tesla billions but also has raised questions about the blurring of politics and business. As the dust continues to settle, shareholders are left questioning whether Tesla can return to its glory days or if this is a starting point for a long-term downfall.

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