ALBAWABA - Tesla Inc. has experienced one of the largest market value declines in its history, shedding nearly $380 billion since the start of 2025, as tensions rise between CEO Elon Musk and U.S. President Donald Trump.
Israeli airstrikes kill two, hit southern Lebanon towns in escalation beyond ceasefire linesMarket data shows that Tesla’s valuation dropped from $1.3 trillion in early January to $950.63 billion by June 6, a 29.3% decline — the worst performance among major global firms this year.
The sharp downturn coincided with an increasingly public dispute between Musk and Trump. The conflict was triggered by Musk’s vocal criticism of Trump’s new tax and spending bill, which proposes eliminating incentives for electric vehicles. Musk slammed the bill as a “disgusting abomination,” claiming it would add $2.5 trillion to the national debt over the next decade.
Trump responded by suggesting that federal contracts with Musk’s companies could be cut, sparking panic among investors. Tesla’s stock subsequently plunged 14% in a single trading day, erasing $152 billion from its market value — the largest one-day drop in the company’s history.
Musk’s personal fortune also took a significant hit, shrinking by $34 billion, though he remains the world’s richest individual with an estimated net worth of $334.5 billion.
The feud escalated further when Trump, who had previously shown public support for Musk by purchasing a Tesla vehicle, said he was considering selling or donating it and referred to Musk as someone who had "lost his mind."
Beyond political drama, Tesla is also dealing with weakening demand for electric vehicles, increased competition from both legacy automakers and emerging startups, and declining sales in the European market.
As of April, Tesla reported a 71% drop in earnings, further amplifying investor concerns over the company's future.
Despite its setbacks, Tesla remains a key player globally, currently ranked 11th in market capitalization.
Analysts warn that continued discord between Musk and Trump could have broader implications for the financial markets. With Tesla playing a critical role in major indices and investor portfolios, a prolonged conflict may lead to a market correction ranging from 5% to 10%.
Experts point to the Tesla case as a clear example of how political instability and policy uncertainty can significantly impact corporate performance, particularly in sectors like technology and renewable energy that rely heavily on government support.
