Trump-Musk feud hits Tesla shares as stock plunges 14.6pc

Washington: Tesla shares nosedived by 14.6% on Thursday as tensions between US President Donald Trump and Tesla CEO Elon Musk boiled over into a full-blown public confrontation, shaking investor confidence and drawing widespread attention across political and business circles.

The fallout began after Musk, who last week stepped down from his brief post as head of the Department of Government Efficiency (DOGE) in the Trump administration, lashed out against the president’s tax and spending bill and accused him of “ingratitude”. But it was Musk’s extraordinary allegation, made without evidence, that truly escalated the row — suggesting Trump’s name was included in unreleased files linked to the convicted sex offender Jeffrey Epstein.

In a post on X, Musk wrote: “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT.” In a follow-up post, he added: “Mark this post for the future. The truth will come out.”

The claim came just moments after Trump threatened to cancel government contracts with Musk’s companies. In a post on Truth Social, the president stated: “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.”

Musk responded immediately, writing: “In light of the President's statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately.”

The Hill reported that names of powerful people previously associated with Epstein, including Trump, Prince Andrew and former US President Bill Clinton, have appeared in court documents tied to Epstein’s years of sexual abuse. Trump has long denied any association with Epstein, stating in 2024: “I was never on Epstein's Plane, or at his 'stupid' Island. Strong Laws ought to be developed against A.I. It will be a big and very dangerous problem in the future.”

The deteriorating relationship between Musk and Trump, once seen as staunch allies, has played out in full view of the public. Musk has openly criticised what he dubbed the “big beautiful bill”, urging Americans to contact lawmakers and “KILL the BILL”. The president, visibly frustrated by Musk’s disapproval, shared his disappointment during a White House meeting with German Chancellor Friedrich Merz.

When asked about Musk’s criticism, Trump said: “I've always liked Elon and that's why I was very surprised. You saw the words he had for me. The words are great. And he hasn't said anything about me that's bad. I'd rather have him criticize me than the bill because the bill is incredible. It's the biggest cut in the history of our country. We've never cut. It's about 1.6 trillion in cuts. It's the biggest tax cut. Tax, you would say, people's taxes will go way down, but it's the biggest tax cut in history. We are doing things in that bill that are unbelievable. And when you look at what we're doing for small businesses, for people, for middle-income people, all of the things we're doing, nobody's ever seen anything like it.”

“And, you know, Elon's upset because we took the EV mandate, which was a lot of money for electric vehicles. And, you know, they're having a hard time with the electric vehicles, and they want us to pay billions of dollars in subsidy. Elon knew this from the beginning. He knew it for a long time ago. That's been in there. That's been, I would say, JD, that hasn't changed. That's been right from the beginning. I think, Mr. Secretary, that hasn't changed at all, right from the beginning. But I know that it disturbed him,” Trump added.

Trump also addressed another source of tension — Musk’s attempt to recommend a Democrat to head NASA. “He wanted and rightfully, he recommended somebody from, that he, I guess, knew very well. I'm sure he respected him, but to run NASA. And I didn't think it was appropriate. And he happened to be a Democrat, like, totally Democrat. And I say, you know, look, we won. We get certain privileges, and one of the privileges went out to appoint a Democrat. NASA is very important. We have great people. General Kane is going to be picking somebody with, we'll be checking him out, seeing -- but he wanted that person, a certain person, and we said no. And, yeah, I can understand why he's upset.”

He further added: “Elon endorsed me very strongly. He actually went up and campaigned for me... But I'm very disappointed because Elon knew the inner workings of this (tax) bill better than almost anybody sitting here. He knew everything about it. He had no problem with it. All of a sudden, he developed the problem when he found out that we're going to have to cut the EV mandate, because that's billions and billions of dollars, and it really is unfair. We want to have cars of all types. We want to have gasoline, combustion, hybrids. We want to be able to sell everything... If you saw the statements he made about me. He said the most beautiful things about me, and he hasn't said bad about me personally, but I'm sure that'll be next. I'm very disappointed in Elon. I've helped Elon a lot...”

Musk quickly fired back on X, writing: “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!” He followed up with: “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.” He concluded: “Such ingratitude.”

He also launched a poll on X, asking whether the US needs a new political party “that actually represents the 80 per cent in the middle”.