President Donald Trump holds a news conference with Elon Musk to mark the tip of the Tesla CEO’s tenure as a special government worker overseeing the U.S. DOGE Service on Friday May 30, 2025 within the Oval Office of the White House in Washington.
Tom Brenner | The Washington Post | Getty Images
Tesla has been facing massive challenges attempting to get back on course after a disastrous first quarter. Those headwinds strengthened considerably this week.
CEO Elon Musk officially concluded his term with the Trump administration at the tip of May, hitting the 130-day mark, the utmost time allowed for a “special government worker.” On his way out the door, Musk expressed sharp criticism of the Trump’s signature spending bill that is being debated in Congress on account of its expected impact on the national debt.
What began off as a policy disagreement quickly escalated into an all-out online brawl, with Musk and President Donald Trump hurling insults at one other from their respective social media platforms. After Musk called the “one, big beautiful bill” an “abomination” and rallied his followers on X to “kill the bill,” Trump said Musk had gone “CRAZY” and threatened to finish government contracts and cut off subsidies for Musk’s corporations. Musk responded, “Go ahead, make my day.”
The rift sent Tesla shares plummeting 14% on Thursday, wiping out roughly $152 billion in value, probably the most for any day in the corporate’s 15 year-history on the general public market. While Musk remains to be the richest person on this planet on paper, his net price plunged by $34 billion, in line with Bloomberg’s Billionaires Index.
More importantly, the spat brought concerning the collapse to a relationship that blended business, politics and power in a way virtually unprecedented in U.S. history. The ramifications to Tesla, which fell out of the trillion-dollar club on Thursday, could possibly be severe, and never simply because Trump is reportedly considering selling or giving freely the red Model S he purchased in March after turning the White House lawn right into a Tesla showroom.
A senior White House official told NBC News on Friday that the president was “not interested” in having a call with Musk to resolve their feud.
Ire from the Trump administration could influence all the pieces from future regulation, investigations and government support for Tesla, to decisions on tariff exemptions the corporate has been looking for with the intention to purchase Chinese-made manufacturing equipment.
Tesla shares were badly underperforming the broader market before the Musk-Trump breakup. Revenue slid 9% in the primary quarter from a 12 months earlier, with auto revenue plummeting 20%, on account of the mixture of increased competition from lower-cost EV makers in China and a consumer backlash to Trump’s political activities and rhetoric.
It’s definitely not what Tesla shareholders were expecting, once they sent the fill up about 30% in the times following Trump’s election victory in November. After spending near $300 million to return Trump to the White House, Musk was poised to have a serious role within the administration and be in position to push through regulatory changes in ways in which benefited his corporations.
As an alternative, his company has suffered, and Musk’s behavior is basically in charge.
One in all his most divisive actions in leading the Trump administration’s Department of Government Efficiency (DOGE) was the dismantling of USAID, which previously delivered billions of dollars of food and medicine to greater than 100 countries.
Beyond the U.S., Musk has endorsed Germany’s far-right extremist party AfD, and gave a gesture that many viewed as a Nazi salute at an inauguration rally.
In response, in recent months, there have been quite a few cases of vandalism or arson of Tesla facilities or vehicles within the U.S., in addition to waves of peaceful protests at Tesla stores and repair centers in North America and Europe.
Advertisements in protest of Musk have appeared in Recent York’s Times Square, and at bus shelters in London, urging people to boycott Tesla, some labeling the corporate’s EVs as “swasticars.” The Vancouver International Auto Show even removed Tesla from its exhibitors’ list fearing the corporate’s presence would cause safety problems.
On top of which can be President Trump’s sweeping tariffs, which have led to concerns that costs will increase for parts and materials crucial for EV production. In its first-quarter earnings report in April, Tesla shunned promising growth this 12 months and said it’s going to “revisit our 2025 guidance in our Q2 update.”
Board is mum
Pension funds that put money into Tesla have said the “crisis” at the corporate requires a pacesetter to work a minimum of 40 hours per week to give attention to solving its problems.
Public officials are echoing that sentiment, and calling on Tesla’s board to take motion.
Recent York City Comptroller Brad Lander said on Thursday in a press release to CNBC that the “schoolyard fight” between Trump and Musk highlights how “Tesla’s weak accountability measures and poor governance threaten not only the corporate’s financial stability and shareholder value, but additionally the longer term of homegrown EV production.”
Brooke Lierman, comptroller of Maryland, told CNBC that the corporate’s board “just isn’t doing its job to be certain that there’s a CEO at Tesla who’s putting the corporate’s interests first.”
Since Musk’s name is synonymous with Tesla, the board must be certain that Tesla can stand by itself no matter who’s leading the corporate, she added.
“Musk’s behavior continues to threaten the longer term of Tesla,” Lierman said. “So long as Tesla is identified with Elon Musk and he continues to be a polarizing figure, he’ll proceed to break the brand which is a big a part of Tesla’s value.”
Musk didn’t reply to a request for comment. CNBC also reached out for comment to board chair Robyn Denholm and directors and executives who work in government relations and within the office of the CEO. None of them responded as of the time of publication.
Elon Musk interviews on CNBC from the Tesla Headquarters in Texas.
CNBC
Tesla investors focused on business fundamentals are justified of their skepticism.
The corporate has didn’t roll out revolutionary and reasonably priced latest model EVs, while Chinese competitors like BYD have flooded the market, particularly in Europe.
Analysts at Goldman Sachs on Thursday lowered their price goal on Tesla mostly on account of the outlook for 2025. Deliveries this quarter are tracking lower for the U.S., the analysts noted, while European sales saw a 50% year-over-year decline in April and one other double-digit drop in May. China sales from those two months were down about 20% from a 12 months earlier.
Quality can be an issue. Tesla has announced eight voluntary recalls of the Cybertruck in 15 months on account of a variety of issues including software bugs and sticking accelerator pedals.
Robotaxi ready?
Musk is urging investors to largely ignore the core business and look to the longer term, which he says is all about autonomous vehicles and humanoid robots.
But even there, Tesla is behind. In AVs the corporate has ceded ground to Alphabet’s Waymo, which is working business robotaxi services in several U.S. markets. After a decade of missed deadlines, Musk has promised a small launch of a Tesla driverless ride-hailing service in Austin this month.
The Austin robotaxi service will operate in a geofenced area, Musk said in a recent interview with CNBC’s David Faber, and can begin with a small fleet of just 10 to twenty Model Y vehicles with Full Self-Driving (FSD) Unsupervised technology installed. If all goes well, Musk has said, Tesla will attempt to rapidly expand its driverless offerings to other markets like San Francisco and Los Angeles.
What consumers won’t be seeing anytime soon are the Cybercab and Robovan vehicles that Tesla touted at its “We, Robot” event last 12 months to drum up customer and investor enthusiasm.
On Friday, Milan Kovac, Tesla’s vice chairman of Optimus robotics, announced he was leaving after joining the corporate in 2016. Musk thanked him for his “outstanding contribution” in a post on X.
Still, there are plenty Tesla bulls and Musk fans who’re believers within the CEO’s vision. The stock’s 4% rebound on Friday is an indication that some saw a chance to purchase the dip.
“I believe the actual story here is the investor base of Tesla literally doesn’t care about anything,” Josh Brown, CEO of Ritholtz Wealth Management and CNBC PRO contributor, told CNBC’s “Halftime Report” Friday. “This remains to be a nothing matters stock.”
FundStrat’s Tom Lee said the Tesla selloff was “overdone.”
Tesla’s market cap, which is dramatically inflated relative to each other U.S. automotive maker, is built on Musk’s vision of Tesla’s Optimus humanoid robots doing factory work and babysitting our youngsters, while self-driving Cybercabs and Robovans become profitable carting around passengers.
Morgan Stanley’s Adam Jonas wrote in a note this week that, “Tesla still holds so many invaluable cards which can be largely apolitical,” pointing to what he sees as the corporate’s “AI leadership, autonomy/robotics, manufacturing, supply chain re-architecture, renewable power, [and] critical infrastructure.”
By way of Tesla’s existing business, probably the most immediate impact from what’s happening in Washington D.C., is the rollback of EV credits in the present budget bill that Musk loudly opposes and that is struggling to search out sufficient support within the Senate. There’s also the matter of the tariffs and whether Tesla is capable of get preferred treatment, a proposition that seems increasingly unlikely with the Musk-Trump fallout.
Matthew LaBrot, a former Tesla staff program manager, told CNBC that he isn’t surprised that Musk blew up his relationship with the president. LaBrot was terminated earlier this 12 months after sending an open letter in protest of Musk’s divisive political activity.
“I’m devastated for the country and the climate, though Elon only has himself in charge,” LaBrot said in an interview. “Back a loose canon, expect stray canon fire.”
Tesla investors cannot know in the mean time how much of Musk’s energy and time will now return to his lone public company, and the business liable for the overwhelming majority of his wealth. Even without politics, he still has SpaceX, AI startup xAI and brain tech startup Neuralink, amongst other businesses.
As of Thursday, Musk still had a West Wing office that hadn’t been cleaned out, two administration officials told NBC News. The space will likely be packed up in the approaching days, certainly one of the officials said.
And while his time within the Trump camp could also be over, Musk has called on his followers to form a brand new party within the U.S.
“Is it time to create a brand new political party in America that really represents the 80% in the center?” he wrote on X on Thursday, in a post that is now pinned at the highest of his page. Based on the post, 80% of 5.6 million respondents to the unofficial poll said “yes.”
Musk’s actions this week can have caused a everlasting rift with the president. But one thing is evident — his company cannot get away from the White House.
WATCH: Impact of Musk’s feud with Trump
