Tesla Stocks Tumble 14% as Trump Threatens to End Government Contracts Over Musk Blowup

TMTPOST -- Tesla Inc. shares finished 14.3% lower on Thursday, weighing heavily on the U.S. stock market as S&P 500 and the Nasdaq Composite dropped more than 0.5% and 0.8%, respectively. Stocks logged their worst day in almost three month, wiping out over $150 billion in market capitalization in a day, as the online squabbling between U.S. President Donald Trump and Tesla CEO Elon Musk marked a breakup of their White House bromance.

Credit：China Central Television

Trump told reporters in the Oval Office on Thursday that he was "very disappointed" in Musk and was "very surprised" about the tech mogul's public bashing the Republican tax-and-spending "Big Beautiful Bill", which was attacked by him as an "abomination" earlier this week. Musk only opposes the bill because they eliminated electric vehicle tax credits from it, according to Trump.

"Elon is upset because we took the EV mandate which was a lot of money for electric vehicles. They're having a hard time the electric vehicles, and they want us to pay billions of dollars in subsidy. Elon knew this from the beginning," said Trump.

Trump claimed Musk had known the tax-policy bill very well but suddenly launched campaign against the bill. "Elon knew the inner workings of this bill better than almost anybody sitting here," said the president. "All of a sudden, he had a problem, and he only developed the problem when he found out that we're going to have to cut the EV mandate."

Trump also suggested that Musk "recommended somebody he knew very well to run NASA. I didn't think it was appropriate, and he happened to be a Democrat, like totally Democrat."

In a post on X Tuesday, Musk argued the Big Beautiful Bill's spending would increase the "already gigantic budget deficit" and "burden America citizens with crushingly unsustainable debt". "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination," Musk posted. "Shame on those who voted for it: you know you did wrong. You know it." The Tesla leader also called for U.S. citizens to "kill the bill" in a tweet Wednesday, posting a poster for the movie "Kill Bill."

Musk quickly rejected Trump's claim Thursday on his social media X. "Whatever," he replied in a post. "Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill. In the entire history of civilization, there has never been legislation that both big and beautiful. Everyone knows this!" "Either you get a big and ugly bill or a slim and beautiful bill," he continued.

In a separate post responding to Trump's remarks that Musk is very familiar with the bill's details, the Tesla CEO said:"False, this bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!"

Musk also took credit for Trump's victory in the presidential election last year. "Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate," Musk wrote, adding "Such ingratitude."

Trump then fired back at Musk on his social media platform Truth Social. "Elon was 'wearing thin,' I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!" Trump posted Thursday afternoon.

Trump also threatened to end Musk's government contracts. "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts. I was always surprised that Biden didn't do it!" said the president.

Musk hit with a claiming on X that Trump "in the Epstein files," adding that "that is the real reason they have not been made public." He also said his company SpaceX will "immediately" begin decommissioning its Dragon spacecraft in light of Trump's threat. He criticized Trump's tariffs would lead to a recession in U.S. in the second half of the year.

Trump posted what could be considered somewhat of an attempt to de-escalate, stating that he "doesn't mind Elon turning against me, but he should have done so months ago." He touted the bill as "one of the Greatest Bills ever presented to Congress", and warned if the Congress doesn't pass the bill, "there will be a 68% Tax Increase, and things far worse than than."

When contacted for comment by Politico, Trump said "Oh it's okay," adding "It's going very well, never done better." It was reported that White House aides advised Trump to focus on the bill and getting it through the Senate instead of the conflict with Musk. The aides also reportedly scheduled a call Friday between Trump and Musk to broker a peace.

Ross Gerber, the CEO of Tesla shareholder Gerber Kawasaki, sharply criticized Musk's behavior in a Bloomberg interview, saying it could lead to lawsuits from the automaker's investors and cut the value of SpaceX in half. Bloomberg noted the bitter clash between the two powerful people raised doubts about whether Trump's administration will deliver key policy changes Musk has sought, namely a framework that would liberalize deployment of autonomous vehicles that Musk has said are critical to Tesla's future and its market value.

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