Tesla Stock Plummets 9% Amid Escalating Musk-Trump Dispute Over Budget Legislation
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Elon Musk reacts during a press event with U.S. President Donald Trump (not pictured) at the White House in Washington, D.C., U.S., May 30, 2025. Nathan Howard | Reuters.
Shares of Tesla fell 9% on Thursday as CEO Elon Musk and President Donald Trump exchanged sharp comments regarding the spending bill progressing through Congress. Trump addressed the media from the Oval Office, stating that Musk was frustrated by the absence of EV credits in the bill.
“Elon and I had a great relationship. I don’t know if we will anymore,” Trump remarked. “I was surprised.”
“Whatever,” Musk replied as the president spoke. “Without me, Trump would have lost the election, Dems would control the House, and the Republicans would be 51-49 in the Senate,” he posted on X.
Musk, recognized as the world’s richest man, has recently threatened lawmakers who support the bill with primary challenges and described the legislation as a “disgusting abomination,” indicating a notable shift in his tone regarding the administration.
Following a 22% surge in May despite lackluster sales numbers, Tesla shares have now dipped 13% this week as Musk’s criticisms of the budget bill intensified. Year-to-date, shares are down over 25% from their peak of $488.54 reached on December 18.
Since Musk’s tenure as a special government employee ended, he has appeared increasingly at odds with the Trump administration, launching a full-scale critique of the president’s tax-cut proposal.
“One of the things about Elon is when he goes all in, he goes all in,” Walter Isaacson, biographer of Musk, remarked on CNBC. “He is not exactly calibrated in these things and he is seriously upset,” Isaacson explained.
Musk, who also leads SpaceX and xAI, has posted a series of criticisms about the Trump bill on X. Reports indicate that Musk attempted to persuade Trump and other GOP officials to amend elements of the bill that would limit EV and residential solar tax credits vital for Tesla’s profitability. Additionally, the measure would introduce a new annual $250 fee on EV drivers.
Tesla is confronted with more fundamental challenges, including falling sales of its electric vehicles in key European markets and a waning brand reputation in the West. The company is also under pressure to launch a long-awaited driverless ride-hailing service this month in Austin, Texas. While Musk claims that Tesla is testing driverless vehicles in that area, rivals like Waymo are already providing a significant commercial robotaxi service in collaboration with Uber.
Isaacson noted that Musk was frustrated with members of the Trump administration who opposed the nomination of Jared Isaacman to lead NASA. “That, to Musk, was infuriating because they were targeting Jared Isaacman … to go after Musk,” Isaacson said on Thursday.
Isaacman’s nomination was withdrawn over the weekend. He has led two private spaceflights with Musk’s SpaceX, commanding crews on missions around the Earth. His payment tech company, Shift4, disclosed that it had invested $27.5 million in SpaceX as of June 30, 2021.
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