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A high-stakes feud between U.S. President Donald Trump and Tesla CEO Elon Musk has rattled markets, prompting the White House to step in. According to Politico, aides have scheduled a call between the two on Friday in an attempt to deescalate the situation. The clash, which erupted publicly on Thursday, centers on Musk’s criticism of Trump’s major tax and spending bill, now advancing through Congress.
Tesla (NASDAQ:TSLA) stock plunged over 14% as tensions peaked, with trading data from Robinhood (NASDAQ:HOOD) later showing a partial recovery—up 5% to $298.64 following the report of the upcoming call. Despite this rebound, Tesla remains down about 25% in 2025, with roughly $150 billion wiped off its market capitalization in just hours.
Trump appeared indifferent when questioned by Politico but reportedly instructed aides to tone down his public attacks. However, on social media, the exchange intensified, with Trump threatening to cancel federal contracts for Musk’s companies, including SpaceX. In response, Musk accused Trump of having ties to the late financier Jeffrey Epstein, further fueling the controversy.
Tesla had previously enjoyed political favor under the Trump administration, but the rift now risks regulatory backlash and contract losses. With Musk’s influence in Washington fading, investor sentiment is turning cautious, especially as political uncertainty threatens Tesla’s government-linked ventures.
The unfolding drama between two of the most high-profile figures in business and politics has captivated the public and markets alike. As the scheduled call looms, stakeholders are watching closely to see if the damage can be contained or if deeper repercussions await Tesla’s stock and U.S. tech policy.
