Tesla Stock Plunges 14% as Elon Musk and President Trump Clash Over Controversial Spending Bill

Tesla Inc. shares nosedived more than 14% on Thursday, June 6, 2025, amid an escalating public feud between CEO Elon Musk and U.S. President Donald Trump. The dramatic stock sell-off followed days of tension that came to a head after the House passed a contentious piece of legislation dubbed the “One Big Beautiful Bill.”

The bill, which has stirred political controversy and rattled investors, proposes sweeping tax reforms, increased military spending, and the elimination of the $7,500 federal EV tax credit—a key policy that has long supported Tesla’s electric vehicle sales.

Sparks Fly Over New Spending Bill

The so-called “One Big Beautiful Bill,” a central part of Trump’s 2024 campaign platform, promises $3.7 trillion in permanent tax cuts, a boost in defense funding, and a new 3.5% tax on cross-border financial transfers. It also includes an exemption from federal income tax on tips for workers earning under $160,000 annually.

But for Elon Musk, the most alarming aspect is the bill’s plan to eliminate the electric vehicle (EV) purchase credit—a move he says could drastically undercut demand for Tesla vehicles in the U.S.

Musk’s frustration boiled over on Tuesday when he posted on his social platform, X:

“I can’t take this anymore.”

His message followed President Trump’s abrupt withdrawal of Jack Isaacman’s nomination to NASA, a candidate strongly backed by Musk. This appeared to be the final straw in a relationship that had already become strained behind closed doors.

Public Feud Shakes Investor Confidence

By Thursday, the disagreement had spilled fully into public view. President Trump responded to Musk’s online criticisms, claiming the billionaire CEO was acting out of “pure self-interest”, only opposing the bill once it impacted his financial interests.

“He only developed a problem when he found out that we’re going to have to cut the Electric Vehicle mandate,” Trump told reporters.

Musk was quick to fire back with sharp rebuttals, calling the president’s stance “shortsighted and ungrateful” and describing the legislation as:

“A massive, outrageous, pork-filled Congressional spending bill… a disgusting abomination. Shame on those who voted for it—you know you did wrong.”

The high-profile spat triggered a massive sell-off in Tesla stock, eroding investor confidence and wiping billions off the company’s market capitalization in a single trading day.

The Fallout: Tesla Stock Performance in 2025

Tesla’s stock has had a turbulent ride in 2025. It opened the year at $390.10, showing modest gains through January. But beginning in February, the stock took a sharp downturn:

• Early February: Dropped below $300.

• End of February: Closed at $292.98.

• March: Lost over 35% of its value, with more than 2 billion shares traded.

• April–May: Brief recovery phase.

• June (month-to-date): Down 17.8%, culminating in Thursday’s 14.26% crash.

The ongoing political drama and uncertainty surrounding federal policy are major contributors to this volatility. With so much of Musk’s personal wealth and Tesla’s valuation tied to federal support for EVs, any rollback could have long-lasting implications for the company’s financial outlook.

What’s Next?

As the “One Big Beautiful Bill” heads to the Senate, the outcome remains uncertain. Investors, climate advocates, and auto manufacturers will be watching closely to see whether the EV credit survives the final version of the bill.

Meanwhile, Musk and Trump—two of the most polarizing figures in American politics and business—remain locked in a public power struggle. What once appeared to be a mutually beneficial alliance has now transformed into a high-stakes feud, sending shockwaves across the markets and adding a fresh layer of unpredictability to Tesla’s future.

One thing is certain: Wall Street is bracing for more turbulence.