Tesla stock tumbles the most since March as Musk and Trump exchange barbs over spending bill
Allison Robbert / AFP via Getty Images
- Shares of Tesla dropped on Thursday as Trump responded to Elon Musk's criticism of the budget bill.
- The stock fell 14%, the most since March, as the president and the Tesla CEO traded barbs.
- Tesla shares are now down roughly 30% year-to-date.
Tesla shares plummeted as much as 18% on Thursday — its biggest intraday drop since September 2020 — before closing 14% lower, the largest closing loss since March.
The declines came amid a spat that has been unfolding between the president and the world's richest person over the budget bill moving through Congress.
Shares of the carmaker were down roughly 32% year-to-date at intraday lows, and finished the day well below the $1 trillion-market-cap threshold.
Paul Hickey, the co-founder of Bespoke Investment Group, told Business Insider he thinks the Trump-Musk feud over the tax bill was the clear catalyst for Tesla's decline on Thursday.
"It could lead to more bad things, punitive actions," Hickey said of Musk's fraying relationship with Trump. "Musk is already kicking himself out of the good graces of the Left. So, if you fell out of the good graces of the Right, that wouldn't necessarily be good."
The spat marks a complete turnaround for the Musk-Trump relationship. Previously, worries around Tesla were that Musk was too close to the president. But Thursday's price action shows any wedge between the two can also be detrimental to the EV-maker's stock.
Tesla stock began to fall on Tuesday, shortly after Musk called the GOP tax and spending bill a "disgusting abomination." On Wednesday, he also posted to his followers on X, "kill the bill."
He's criticized the legislation for its potential to add to the budget deficit and has suggested it would undo the work of the Department of Government Efficiency, which Musk stepped back from last month.
Speaking to reporters at the White House on Thursday, Trump responded by saying he was "very disappointed" with Musk's reaction to the tax bill, his first direct response to the Tesla CEO's criticism of the sweeping budget bill that's a cornerstone of Trump's agenda.
"Elon knew the inner workings of the bill better than almost anybody sitting here. Better than you people. He had no problem with it. All of sudden he had a problem and he only developed the problem when he found out we're going to have to cut the EV mandate," Trump said.
Musk fired back at the president on X, refuting the claim that he knew the contents of the tax bill.
"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!" the Tesla CEO wrote.
Tesla and the White House did not immediately respond to a request for comment sent by Business Insider.