The Tesla Inc (NASDAQ: TSLA) stock price has had its fair share of dramatic swings in its 15-year history. But the one that occurred last night is certainly one of the most dramatic, both for its size and the reasons behind it.
On Wednesday morning (our time), Tesla shares closed at US$332.05 each. But this morning, when the US markets wrapped up trading, those same shares closed at just US$284.70 each. That's down a horrid 14.26% in just one trading day. Funnily enough, this dramatic drop merely brings Tesla to where it was around a month ago.
We still aren't even close to the ~US$220 levels we saw back in early April. And a long way from the electric vehicle and battery manufacturer's 52-week low of US$167.42.
But even so, this is a significant one-day loss for Tesla. And that's putting it mildly, considering the company shed roughly US$235 billion from its market capitalisation last night.
So what's behind this blockbuster loss for the Tesla stock price?
Well, it's Elon Musk, of course. The Tesla CEO was embroiled in a very public spat with US President Donald Trump overnight.
As you may have heard, Musk and Trump have been joined at the hip ever since Trump's January inauguration. Musk hitched his wagon to Trump's political fortunes in the lead-up to last year's presidential election, donating hundreds of millions of dollars to Trump's campaign.
Upon Trump's success, Musk became a prominent figure in the administration, famously (or perhaps infamously) heading up the so-called 'Department of Government Efficiency (DOGE)'.
Musk departed from this role last month. But, it seems, he did not relish giving up the spotlight.
Image source: Getty Images
Musk-Trump breakdown tanks Tesla stock price
Yesterday, Musk posted on his social media site X (formerly Twitter) regarding Trump's budget proposal for the US, which has been labelled the 'One Big Beautiful Bill'.
This is a controversial proposal, as it proposes large cuts to government spending, but even larger reductions in personal and corporate taxes. Critics say it has the potential to explode the already bulging US fiscal deficit.
Well, Musk made his feelings about the bill very clear earlier this week, posting that it was "a disgusting abomination" and that "Without [Elon], Trump would have lost the election".
Well, that didn't go down too well with Trump. He responded that "Elon was 'wearing thin', I asked him to leave" and that "he just went CRAZY". He also, crucially for the Tesla stock price, wrote that "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts".
The feud has since escalated, with Musk posting 'Kill Bill' memes, that the above statement was "an obvious lie" and seemingly agreeing with a statement that Trump should "be impeached". He also salaciously claimed that Trump "was in the Epstein files".
So it's obvious that investors were reacting to this extraordinary breakdown (perhaps break-up) in relations between the world's most powerful person and the world's richest person when they wiped US$235 billion from the Tesla stock price last night.
What happens next is anyone's guess. We'll also have to wait and see if there are any material impacts on Tesla's business following the falling out. What a week to be alive.
