Musk-Trump Feud Threatens Tesla's Future and Autonomous Vehicle Plans

From allies to enemies: the cost of a Musk-Trump split

Washington (AFP) - The bitter clash between Elon Musk and Donald Trump has drawn a spotlight on the South African-born tycoon's businesses. Here is a look at his affairs as their White House partnership turns toxic, with billions of dollars in market value and government contracts hanging in the balance. Tesla The Tesla car company is the cornerstone of Musk's business empire and has suffered considerably since the entrepreneur dove into politics. The electric vehicle giant's stock has plummeted more than 20 percent since the start of the year, reflecting investor anxiety about Musk's increasingly polarizing public persona. The damage reached a fever pitch on Thursday when the Musk-Trump feud erupted out in the open. In a matter of hours, Tesla shed more than $150 billion in market capitalization, wiping $34 billion from Musk's personal fortune. The alliance with Trump was supposed to have been Tesla's golden ticket, even if the administration was going to scrap tax credits that had helped it become an automobile juggernaut. More importantly, Musk could count on Trump's blessing for his ultimate vision: putting fully autonomous vehicles on American roads. This ambition has been stymied by government regulation over the years, with authorities slowing efforts due to worries that the technology is not ready to hit the road at mass scale. The Trump administration was expected to lift these regulatory constraints -- a promise now in serious jeopardy. "Musk needs Trump because of the regulatory environment, and you can't have Trump go from friend to foe," said analyst Dan Ives of Wedbush Securities. The administration also regulates vehicle design and would influence the mass production of robotaxis that Musk intends to launch in a pilot program in Austin, Texas, this month. Musk's hard-right political pivot has alienated the very customers Tesla needs most: environmentally conscious and liberal-leaning buyers who once saw the brand as aligned with their values. Some drivers have resorted to bumper stickers declaring their cars were purchased "before Elon went crazy." The damage is showing up in sales figures. In Europe, while overall electric vehicle sales climbed, Tesla's market share crashed 50 percent in April as attention focused on Musk's political activities and the company's aging product lineup. A recent Morgan Stanley survey said 85 percent of investors believe Musk's political involvement is actively harming Tesla's business. SpaceX A prolonged battle with Trump poses existential risks for SpaceX, Musk's space exploration company that has become NASA's most critical partner. SpaceX and NASA are deeply interdependent. SpaceX depends on government contracts worth tens of billions of dollars, while NASA relies on SpaceX for everything from astronaut transportation to satellite deployment. SpaceX's portfolio includes some of the most sensitive national security projects: launching astronauts to the International Space Station, building spy satellites and operating the Starlink satellite network. The financial windfall has been enormous, with a December share sale valuing SpaceX at $350 billion -- $140 billion more than just six months earlier, largely due to anticipated government largesse under Trump. In the heat of the clash on Thursday, Trump threatened to cut off all government contracts, while Musk said he would mothball the Dragon spacecraft, which is vital for ferrying astronauts to and from the International Space Station -- though he later walked back this threat. xAI Musk has huge plans for his xAI artificial intelligence company. He's angling to compete with OpenAI, the ChatGPT-maker that was co-founded by Musk a decade ago and is now steered by his archrival Sam Altman. Altman has his own inroads to the White House, where he signed a massive AI infrastructure initiative called the Stargate Project, which recently expanded to Saudi Arabia and Abu Dhabi. Initially dismissing Stargate as unrealistic, Musk later worked behind the scenes to undermine the project, reportedly telling investors that Trump wouldn't approve any expansion that excluded xAI. Adding another layer of complexity, Musk folded X (formerly Twitter) into xAI earlier this year. Musk's $44 billion acquisition in 2022 transformed the site into the go-to platform for conservatives, but Trump himself remains an infrequent user, preferring his own Truth Social platform for communication.

Musk's empire at risk after Trump feud opens multifront fight

What began as Elon Musk's embrace of right-wing populism has become a defining -- and potentially harmful -- chapter in his business career. By endorsing Donald Trump's MAGA movement and far-right parties in Europe, Musk alienated a big portion of his original customer base, eroding Tesla's brand, sales and market share around the globe. Then came this week's rupture: a personal and public breakup with Trump that prompted threats of retaliation from a man with control over the world's most powerful government. By simultaneously burning bridges with both his customers and now the political movement he funded and amplified for months, Musk now faces a rare convergence of threats: collapsing brand loyalty, shaky revenues, and mounting legal and regulatory risk. Tesla's sales are already stumbling under the weight of partisan baggage. SpaceX, long seen as a strategic national asset, is facing new scrutiny as political winds shift. And the green shoots at X -- Musk's $44 billion "free speech" experiment -- that were fueled by Musk's proximity to the White House and the ad dollars that followed, may soon disappear. "Elon isn't functioning to the benefit of his shareholders," said Ross Gerber, the CEO of Tesla shareholder Gerber Kawasaki, which has been reducing its Tesla holdings over the last few years. Speaking on Bloomberg Television on Thursday while the meltdown was still going on, Gerber said Musk's behavior is leading to the "dismantling of the Musk empire in real time." With enemies on both flanks, Musk finds himself at the center of a storm fueled by consumer revolt and political hostility. "Nobody on the right is going to buy a Tesla, nobody on the left is going to buy a Tesla. Elon is a man without a country," said Steve Bannon, an outside adviser to Trump who has long been critical of Musk, in an interview. Bannon says he is "in continual conversations at the most senior levels" of the Trump administration to push them to revoke Musk's security clearance and use the Defense Production Act to seize SpaceX and Starlink on grounds they're vital to U.S. national security. Even if Trump doesn't take such extreme measures, there is no shortage of retaliatory options for the White House. The president could try to wield the power of agencies like the Securities and Exchange Commission, the National Highway Traffic Safety Administration and the Federal Aviation Administration to inflict real harm -- or even just incessant regulatory morass -- onto all of Musk's businesses and the source of his wealth. In just one day, the Musk-Trump spat shaved $34 billion from his personal net worth, the second-largest loss ever in the history of the Bloomberg Billionaires Index of the 500 wealthiest people on the planet. The only bigger wealth hit: his own wipeout in November 2021. Tesla lost $153 billion of market value Thursday, with shares reversing course Friday after Musk began to simmer down. Musk has faced deep stretches of financial pain before. There are flanks of skeptics who have, over the years, called for his impending demise only to be proven wrong by the world's richest man and his cult following of fans and funders willing to throw ever-growing sums of money at his ambitions. Most famously, Tesla flirted with bankruptcy only to reverse course and become the biggest electric vehicle seller in the world. Musk's $44 billion purchase of X was widely panned as the company's debt languished on banks' books, only to see those fortunes reversed after Trump's election. "Musk has a habit of teetering on the edge of destruction and pulling himself back just in the nick of time," said Nancy Tengler, whose firm holds 3.5% of its growth portfolio in Tesla stock, in a Friday interview on Bloomberg Television. Tengler, CEO and chief investment officer of Laffer Tengler Investments, said her firm has been adding Tesla shares in recent months but now has a "full position." "He needs to dial down the rhetoric and the drama and get back to the business," she said, as investors own Tesla stock for growth, not for "the histrionics." To pull off a rebound this time around, Musk is going to have to persuade people to start buying his electric vehicles at a faster clip and reverse the painful sales slide in the U.S., Europe and around the world. He's also going to have to attract riders to his new robotaxi service in Austin, Texas, as the company makes a gigantic bet on artificial intelligence, robotics and self-driving cars. Musk has lobbied lawmakers to help clear a path for driverless vehicles, something Trump initially endorsed. It's now unclear if the Trump-Musk fallout complicates the regulatory environment for autonomous vehicles and potentially slows the path forward for Tesla's robotaxi network. "The disagreement will not help Tesla demand but could potentially (temporarily) alienate multiple sides of the political spectrum," said Morgan Stanley analyst Adam Jonas in a research note entitled "Well That Escalated Quickly ..." Jonas said emotions are "running high" and that he's sticking to his long-term $410 price target on Tesla's share price but is bracing for near-term volatility and is "prepared for the stock to give up more." Other tests in the coming weeks may include a $5 billion debt offering of the billionaire's AI company, xAI, as well as funding rounds for xAI and SpaceX. Musk recently closed a $650 million late-stage raise for his neurotechonlogy company Neuralink from big investors including Sequoia Capital, ARK Investment Management and Founders Fund. From a legal and regulatory perspective, there's even more at stake for Musk if the Trump administration turns on the billionaire and claws back contracts like the president threatened Thursday. SpaceX, one of the world's most valuable startups with a market value of $350 billion, has received more than $22 billion in unclassified contracts from the Defense Department and NASA since 2000, according to data from Bloomberg Government. It launches critical national security satellites for the Pentagon and the U.S. is depending on the Musk-led company to develop a spacecraft to put American astronauts on the moon in as little as two years. Musk's vow to decommission its all-important Dragon spacecraft, which ferries cargo and people to the International Space Station for the U.S., sent shock waves throughout the industry. Following through with the threat, which Musk later walked back, would sever a vital part of the U.S. space program. "It is untenable to have a CEO of a prime defense and aerospace contractor threaten to shut down services the government has contracted with them to perform," said Lori Garver, a former NASA deputy administrator under former President Barack Obama. Garver says NASA needs SpaceX, but that SpaceX's business model also depends, in part, on the U.S. government. "Elon has already walked back decommissioning Dragon, because they do require now, as a big part of their business plan, government contracts. But they provide a service for those contracts. So it's a symbiotic relationship," Garver said. On a more day-to-day basis, government agencies could try to inflict pain on Musk's businesses by delaying everything from space launches to satellite service to robotaxi expansion. Investigations into publicly traded Tesla or the finances of his companies could include the SEC, as well as antitrust probes and Federal Trade Commission interest around social media moderation, data use or AI. So far, Musk and Trump may be trying to at least press pause on the public spectacle. White House officials say Trump plans to focus his attention on inflation and the economy rather than speak to Musk, and insinuated without evidence that the billionaire was agitating for a call with the president. (In a pair of posts on his social media platform Friday morning, Trump intensified his push for Federal Reserve Chair Jerome Powell to lower rates.) As for pulling Musk's government contracts, Trump hasn't yet pursued any steps to follow through with his threats, one of these people said. He is, however, thinking of getting rid of his Tesla.

Trump-Musk Row Slams Tesla Shares, $150 Billion in Market Value Wiped Out

Trump alleges Musk was upset as the bill revokes tax benefits on EVs Tesla shares went into free-fall on Thursday as President Donald Trump publicly feuded with the electric vehicle maker's billionaire CEO Elon Musk, his self-proclaimed "First Buddy." Investors watched the unfolding drama with growing worry about what the fracas could mean for Musk's business empire. The carmaker's shares ended the day down 14 percent, wiping off $150 billion (roughly Rs. 1,28,621 crore) in market value on a day absent other news about the company. Traders dumped Tesla in heavy trading after Musk quickly responded to Trump's criticism with social media posts that stepped up criticism of the president's tax bill. Trump fired back further, alleging Musk was upset because the bill takes away tax benefits for electric vehicle purchases. Openly feuding with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire. The US Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels. The agency is also investigating Tesla's driver-assistance software, known as "Full Self-Driving," following a fatal crash. "Elon's politics continue to harm the stock. First he aligned himself with Trump, which upset many potential Democratic buyers. Now he has turned on the Trump administration," said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network. With EV sales falling, Musk over the last year has re-oriented Tesla's future around self-driving robotaxis. On an earnings call last year, he said investors "should sell their Tesla stock" if they did not believe the company would solve the technological challenges of driverless vehicles. Wedbush analysts have said the AI and autonomous opportunities could be worth $1 trillion (roughly Rs. 85,73,329 crore) alone in market value for the company. Musk has advocated for one federal approval process for autonomous vehicles to streamline the current maze of different state regulations. Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management, said the feud with Trump "creates a negative force against Tesla" that could jeopardize regulations and risk more government investigations. "Every benefit that was perceived he would have got now turns into a negative," Gerber said. Musk, the world's richest man and a key figure in the Department of Government Efficiency's (DOGE) cost-cutting plan for several months, blasted Trump's "big beautiful bill" this week, after he decided to spend less time in the White House and instead focus on his companies. Following Thursday's selloff, his net worth fell by roughly $27 billion (roughly Rs. 2,31,557 crore) to $388 billion (roughly Rs. 33,27,310 crore), according to Forbes. Trump on Thursday said on his Truth Social platform that the "easiest way to save money in our Budget, billions and billions of dollars, is to terminate Elon's governmental subsidies and contracts." Transportation Secretary Sean Duffy has already moved to exempt autonomous vehicles from some safety requirements, and NHTSA said in April it is "actively engaged in developing a multi-faceted regulatory framework" for autonomous vehicles. Although the federal government has already started to streamline some regulations around autonomous driving, Morningstar analyst Seth Goldstein said regulators might possibly craft rules in a way that would single out Tesla. Most autonomous vehicle companies use sensors such as radar and lidar to detect objects, for example, but Tesla relies solely on cameras. Goldstein said federal regulators might devise rules requiring lidar, which would hurt Tesla. "With President Trump, being on his bad side always creates risk that you're going to get personal retaliation," Goldstein said. He doubted that such an outcome was likely, though, because many other companies have been pushing for new regulations for years. The stock has been on a roller-coaster ever since Musk endorsed Trump in mid-July 2024 in his re-election bid, gaining 169 percent from that point through mid-December. That was followed by a 54 percent slide through early April as a "Tesla Takedown" protest intensified. Musk's leadership of DOGE and alignment with the Trump administration had put off some car buyers, with sales slumping in Europe, China and key US markets like California. The House of Representatives version of Trump's budget bill proposes largely ending the popular $7,500 (roughly Rs. 6.43 lakh) EV subsidy by the end of 2025. Tesla and other automakers have relied on incentives for years to drum up demand, but Trump promised during the transition to end the subsidy. Tesla could face a $1.2 billion (roughly Rs. 10,290 crore) hit to its annual profit, along with an additional $2 billion setback to regulatory credit sales due to separate Senate legislation targeting California's EV sales mandates, according to J.P. Morgan. The company is still the most valuable automaker worldwide by a long shot. Through Wednesday, Tesla's market value stood at about $1 trillion (roughly Rs. 85,73,329 crore), well above Toyota Motor's $290 billion (rough Rs. 24,87,019 crore). "There were a lot of people excited about Tesla because the political winds were at his (Musk's) back. And now they've turned into headwinds in a lot of different ways," Steve Sosnick, chief strategist at Interactive Brokers, said. Tesla trades at 150 times profit estimates, a steep premium to other Big Tech stocks such as Nvidia. "I am short Tesla. I don't understand it. I don't understand its valuation. I don't understand its fundamentals. I think it's overhyped," Bob Doll, Crossmark Global Investments chief investment officer, said. © Thomson Reuters 2025

Trump-Musk row slams Tesla shares, $150 billion in market value wiped out

Tesla's shares plummeted after a public feud erupted between Elon Musk and Donald Trump, erasing $150 billion in market value. Investors grew concerned about the potential impact on Musk's business empire as the two exchanged criticisms over tax policies and electric vehicle subsidies. The spat raises regulatory hurdles for Tesla's autonomous vehicle ambitions, potentially jeopardizing approvals and increasing government scrutiny.Tesla shares went into free-fall on Thursday as President Donald Trump publicly feuded with the electric vehicle maker's billionaire CEO Elon Musk, his self-proclaimed "First Buddy." Investors watched the unfolding drama with growing worry about what the fracas could mean for Musk's business empire. The carmaker's shares ended the day down 14%, wiping off $150 billion in market value on a day absent other news about the company. Traders dumped Tesla in heavy trading after Musk quickly responded to Trump's criticism with social media posts that stepped up criticism of the president's tax bill. Trump fired back further, alleging Musk was upset because the bill takes away tax benefits for electric vehicle purchases. Openly feuding with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire. The U.S. Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels. The agency is also investigating Tesla's driver-assistance software, known as "Full Self-Driving," following a fatal crash. "Elon's politics continue to harm the stock. First he aligned himself with Trump, which upset many potential Democratic buyers. Now he has turned on the Trump administration," said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network. With EV sales falling, Musk over the last year has re-oriented Tesla's future around self-driving robotaxis. On an earnings call last year, he said investors "should sell their Tesla stock" if they did not believe the company would solve the technological challenges of driverless vehicles. Wedbush analysts have said the AI and autonomous opportunities could be worth $1 trillion alone in market value for the company. Musk has advocated for one federal approval process for autonomous vehicles to streamline the current maze of different state regulations. Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management, said the feud with Trump "creates a negative force against Tesla" that could jeopardize regulations and risk more government investigations. "Every benefit that was perceived he would have got now turns into a negative," Gerber said. Musk, the world's richest man and a key figure in the Department of Government Efficiency's (DOGE) cost-cutting plan for several months, blasted Trump's "big beautiful bill" this week, after he decided to spend less time in the White House and instead focus on his companies. Following Thursday's selloff, his net worth fell by roughly $27 billion to $388 billion, according to Forbes. Trump on Thursday said on his Truth Social platform that the "easiest way to save money in our Budget, billions and billions of dollars, is to terminate Elon's governmental subsidies and contracts." Transportation Secretary Sean Duffy has already moved to exempt autonomous vehicles from some safety requirements, and NHTSA said in April it is "actively engaged in developing a multi-faceted regulatory framework" for autonomous vehicles. Although the federal government has already started to streamline some regulations around autonomous driving, Morningstar analyst Seth Goldstein said regulators might possibly craft rules in a way that would single out Tesla. Most autonomous vehicle companies use sensors such as radar and lidar to detect objects, for example, but Tesla relies solely on cameras. Goldstein said federal regulators might devise rules requiring lidar, which would hurt Tesla. "With President Trump, being on his bad side always creates risk that you're going to get personal retaliation," Goldstein said. He doubted that such an outcome was likely, though, because many other companies have been pushing for new regulations for years. The stock has been on a roller-coaster ever since Musk endorsed Trump in mid-July 2024 in his re-election bid, gaining 169% from that point through mid-December. That was followed by a 54% slide through early April as a "Tesla Takedown" protest intensified. Musk's leadership of DOGE and alignment with the Trump administration had put off some car buyers, with sales slumping in Europe, China and key U.S. markets like California. The House of Representatives version of Trump's budget bill proposes largely ending the popular $7,500 EV subsidy by the end of 2025. Tesla and other automakers have relied on incentives for years to drum up demand, but Trump promised during the transition to end the subsidy. Tesla could face a $1.2 billion hit to its annual profit, along with an additional $2 billion setback to regulatory credit sales due to separate Senate legislation targeting California's EV sales mandates, according to J.P. Morgan. The company is still the most valuable automaker worldwide by a long shot. Through Wednesday, Tesla's market value stood at about $1 trillion, well above Toyota Motor's $290 billion. "There were a lot of people excited about Tesla because the political winds were at his (Musk's) back. And now they've turned into headwinds in a lot of different ways," Steve Sosnick, chief strategist at Interactive Brokers, said. Tesla trades at 150 times profit estimates, a steep premium to other Big Tech stocks such as Nvidia. "I am short Tesla. I don't understand it. I don't understand its valuation. I don't understand its fundamentals. I think it's overhyped," Bob Doll, Crossmark Global Investments chief investment officer, said.

Trump Vs. Musk: President Selling His Tesla -- Is Targeting Robotaxis Next? - Tesla (NASDAQ:TSLA)

A feud between Tesla Inc TSLA CEO Elon Musk and President Donald Trump escalated Thursday with comments made in interviews and across social media. The fight sent shares of Tesla lower Thursday and the stock could go lower with the potential for Trump to harm the electric vehicle sector and the company. What Happened: Musk's opposition to the "Big Beautiful Bill" saw Trump accuse the Tesla CEO of only speaking out in opposition due to the bill hurting EV tax credits and his own company. A series of back-and-forth messages on social media saw some attacks against Tesla and the government and some personal attacks. "This is an unfortunate episode from Elon, who is unhappy with the One Big Beautiful Bill because it does not include the policies he wanted. The President is focused on passing the historic piece of legislation and making our country great again," White House Press Secretary Karoline Leavitt told Benzinga when asked for comment on some tweets made by Musk. Tesla stock posted its biggest one-day market capitalization fall on Thursday, with investors worried about the damage the fight could cause to Musk-related companies. Trump threatened to pull government subsidies related to SpaceX and already planned to remove EV tax credits, which could harm Tesla and the overall electric vehicle sector. Here's a look at some of the areas that could be impacted. Robotaxi Concerns: Given Trump's past opposition to autonomous vehicles, or robotaxis, one area that could be closely watched now is the future of these vehicles. Hours before Musk unveiled the Tesla Cybercab in California on Oct. 10, 2024, Trump spoke at the Detroit Economic Club and took on autonomous vehicles. "Do you like autonomous? Does anybody like an autonomous vehicle? Know what that is? Right? When you see a car driving along? Some people do, I don't know. A little concerning to me, but the autonomous vehicles we're going to stop from operating on American roads," Trump said. Trump's comments came despite his growing friendship with Musk, who had been campaigning for him in the 2024 election. After once threatening to ban autonomous vehicles in America, Trump appeared to have had a change of heart and eased restrictions on self-driving vehicles. The reversal could help Tesla in its push to expand FSD and bring robotaxis to the market. With Tesla set to launch its robotaxi service in Texas next week, all eyes will be on Trump to see if he reverses course again on the issue. Read Also: Tesla The Best Elon Musk Company? 84% Say No -- These 3 Rank Higher Tesla Brand Damage: Tesla has suffered from brand damage in the last year. A series of protests took on the EV company, and some owners traded in their vehicles due to Musk's political push. Previously appealing to fans of clean energy initiatives and Silicon Valley investors, Tesla appeared to change its target demographic with Trump supporters and MAGA (Make America Great Again) fans buying Tesla vehicles to show support for Musk and his backing of the president. With a feud between Trump and Musk now escalated, Trump fans might be the last people who want to buy a Tesla vehicle. A report on Friday from the New York Post said Trump is planning to sell or give away the red Tesla Model S he bought on the White House lawn in a show of public support for Musk and Tesla at the time, as the brand saw several violent attacks against stores and vehicles. While Trump can not drive the vehicle due to presidential rules, he said he would leave it on the White House lot for staff use. Trump selling his Tesla vehicle could be negative for the EV company and show that his support for it has been withdrawn. Other Areas: In addition to the above-mentioned items, Trump's plan to end the $7,500 EV tax credit will hurt Tesla and the sector. Musk has been supportive of ending this incentive and analysts say it could actually help the company and crush Tesla's rivals in the sector. The Tesla CEO and his companies have been under past and current investigations by many government organizations including the SEC and DOJ. While working with the government through the Department of Government Efficiency, Musk replaced the leaders at some of the organizations that investigate and regulate his companies. The rift between Musk and Trump could lead to a return of investigations against the CEO and his companies. Musk and his SpaceX company have received government contracts in the past and those could come under question, as Trump seemed to signal in one social media post. Trump said government subsidies and contracts that help Musk could be terminated to save billions of dollars. Musk indicated that he could end the SpaceX Dragon program, which has brought astronauts to and from the International Space Station. SpaceX's Starlink was also in talks to secure deals with the FAA and is a major player in providing internet in humanitarian efforts and international conflict areas like Ukraine. The battle between Trump and Musk could put into question whether Trump could try to block Musk's efforts. TSLA Price Action: Tesla stock is up 5.8% to $301.09 on Friday versus a 52-week trading range of $167.41 to $488.54. Tesla stock is down 20.7% year-to-date in 2025, with shares falling over 12% in the last five days. Read Next: Tesla Owners Who Don't Like Musk Are Letting Bumper Stickers Do The Talking Image created using artificial intelligence via Midjourney. TSLATesla Inc$300.715.62%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.07Growth91.86Quality86.74Value9.28Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Trump-Musk row slams Tesla shares, $150 billion in market value wiped out

(Reuters) -Tesla shares went into free-fall on Thursday as President Donald Trump publicly feuded with the electric vehicle maker's billionaire CEO Elon Musk, his self-proclaimed "First Buddy." Investors watched the unfolding drama with growing worry about what the fracas could mean for Musk's business empire. The carmaker's shares ended the day down 14%, wiping off $150 billion in market value on a day absent other news about the company. Traders dumped Tesla in heavy trading after Musk quickly responded to Trump's criticism with social media posts that stepped up criticism of the president's tax bill. Trump fired back further, alleging Musk was upset because the bill takes away tax benefits for electric vehicle purchases. Openly feuding with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire. The U.S. Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels. The agency is also investigating Tesla's driver-assistance software, known as "Full Self-Driving," following a fatal crash. "Elon's politics continue to harm the stock. First he aligned himself with Trump, which upset many potential Democratic buyers. Now he has turned on the Trump administration," said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network. With EV sales falling, Musk over the last year has re-oriented Tesla's future around self-driving robotaxis. On an earnings call last year, he said investors "should sell their Tesla stock" if they did not believe the company would solve the technological challenges of driverless vehicles. Wedbush analysts have said the AI and autonomous opportunities could be worth $1 trillion alone in market value for the company. Musk has advocated for one federal approval process for autonomous vehicles to streamline the current maze of different state regulations. Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management, said the feud with Trump "creates a negative force against Tesla" that could jeopardize regulations and risk more government investigations. "Every benefit that was perceived he would have got now turns into a negative," Gerber said. Musk, the world's richest man and a key figure in the Department of Government Efficiency's (DOGE) cost-cutting plan for several months, blasted Trump's "big beautiful bill" this week, after he decided to spend less time in the White House and instead focus on his companies. Following Thursday's selloff, his net worth fell by roughly $27 billion to $388 billion, according to Forbes. Trump on Thursday said on his Truth Social platform that the "easiest way to save money in our Budget, billions and billions of dollars, is to terminate Elon's governmental subsidies and contracts." Transportation Secretary Sean Duffy has already moved to exempt autonomous vehicles from some safety requirements, and NHTSA said in April it is "actively engaged in developing a multi-faceted regulatory framework" for autonomous vehicles. Although the federal government has already started to streamline some regulations around autonomous driving, Morningstar analyst Seth Goldstein said regulators might possibly craft rules in a way that would single out Tesla. Most autonomous vehicle companies use sensors such as radar and lidar to detect objects, for example, but Tesla relies solely on cameras. Goldstein said federal regulators might devise rules requiring lidar, which would hurt Tesla. "With President Trump, being on his bad side always creates risk that you're going to get personal retaliation," Goldstein said. He doubted that such an outcome was likely, though, because many other companies have been pushing for new regulations for years. The stock has been on a roller-coaster ever since Musk endorsed Trump in mid-July 2024 in his re-election bid, gaining 169% from that point through mid-December. That was followed by a 54% slide through early April as a "Tesla Takedown" protest intensified. Musk's leadership of DOGE and alignment with the Trump administration had put off some car buyers, with sales slumping in Europe, China and key U.S. markets like California. The House of Representatives version of Trump's budget bill proposes largely ending the popular $7,500 EV subsidy by the end of 2025. Tesla and other automakers have relied on incentives for years to drum up demand, but Trump promised during the transition to end the subsidy. Tesla could face a $1.2 billion hit to its annual profit, along with an additional $2 billion setback to regulatory credit sales due to separate Senate legislation targeting California's EV sales mandates, according to J.P. Morgan. The company is still the most valuable automaker worldwide by a long shot. Through Wednesday, Tesla's market value stood at about $1 trillion, well above Toyota Motor's $290 billion. "There were a lot of people excited about Tesla because the political winds were at his (Musk's) back. And now they've turned into headwinds in a lot of different ways," Steve Sosnick, chief strategist at Interactive Brokers, said. Tesla trades at 150 times profit estimates, a steep premium to other Big Tech stocks such as Nvidia. "I am short Tesla. I don't understand it. I don't understand its valuation. I don't understand its fundamentals. I think it's overhyped," Bob Doll, Crossmark Global Investments chief investment officer, said. (Reporting by Chris Kirkham and Abhirup Roy, Akash Sriram and Kanchana Chakravarty; additional reporting by Saqib Iqbal Ahmed and Gertrude Chavez-Dreyfuss in New York; Editing by Michael Colias, David Gaffen, Anil D'Silva, Arun Koyyur and David Gregorio) By Akash Sriram, Kanchana Chakravarty, Chris Kirkham and Abhirup Roy