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Despite Elon Musk targeting DJT in his tweet that alleged Trump's involvement in Epstein files, tables may have turned on Tesla stock as Tesla stock dropped a whopping 12%, with Trump threatening to cut Tesla's government contracts, despite Musk's targeted tweet to Trump and DJT (Trump Media & Technology Group Corp) losing nearly 8% since Musk's tweet that garnered nearly 130M views in the platform.
The spectacular public breakdown between President Donald Trump and tech billionaire Elon Musk on Thursday sent shockwaves through financial markets and Washington, raising serious questions about the future of America's space program and electric vehicle industry. What began as policy disagreements over Trump's domestic spending bill quickly escalated into a personal war of words across social media platforms.
The most explosive moment in Musk's public showdown with Trump came when tech billionaire made unsubstantiated claims about Trump's connection to Jeffrey Epstein, the disgraced financier who died in federal custody in 2019. "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!" Musk posted, garnering nearly 130 million views.
The financial fallout was immediate and severe. Tesla shares plummeted 14.3 percent during Thursday trading, erasing approximately $150 billion from the company's market value in what marked the automaker's worst single-day performance since March and its second-worst decline since 2020. The sell-off accelerated throughout the day as the feud intensified.
Trump Media & Technology Group, the parent company of Truth Social that is majority-owned by the Trump family, also declined 8 percent on Thursday. However, both stocks steadied in after-hours trading, though trading volumes remain thin outside regular market hours and significant volatility could return when markets reopen.
Competitors to Musk's companies saw immediate gains from the chaos. AST Spacemobile rose as much as 5.8 percent while EchoStar surged more than 15 percent as investors speculated about potential shifts in government contracts.
"Investors fear that this Musk/Trump battle will stop their friendship and change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump administration," analysts at Wedbush Securities said in a research note. Their deteriorating relationship is "a shock to the market and putting major fear for Tesla investors on what is ahead."
The dispute escalated when Trump threatened to terminate the billions of dollars in federal contracts and subsidies that Musk's companies receive. "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts," Trump wrote on Truth Social. "I was always surprised that Biden didn't do it!"
Last year, Musk's companies were promised $3 billion across nearly 100 different contracts with 17 federal agencies. Most of these contracts were awarded to SpaceX, Musk's space technology company, which has become the linchpin of American civilian and military spaceflight operations.
The threat carries significant weight given the federal government's heavy reliance on SpaceX. The company's Dragon capsules are currently NASA's only reliable method for transporting astronauts and cargo to the International Space Station. SpaceX also routinely launches classified U.S. military and intelligence satellites and has contracts to build more secure versions of its Starlink internet satellites for military communications.
Trump also referenced cutting Tesla's government benefits, writing that Musk "went CRAZY" over the elimination of federal tax credits and subsidies for electric vehicles in the policy bill currently moving through Congress. The Republican spending bill would eliminate the $7,500 federal tax credit for electric vehicle purchases, which could cost Tesla $1.2 billion annually according to JPMorgan analysts.
Musk responded with increasingly personal attacks on X, the social media platform he owns. "Without me, Trump would have lost the election," Musk wrote. "Such ingratitude."
Musk also agreed with a post suggesting Trump should be impeached and replaced by Vice President JD Vance. In another cutting remark, he wrote: "Some food for thought. Trump has 3.5 years left as President, but I will be around for 40+ years."
The billionaire posted nearly 80 times on X throughout Thursday, with the vast majority focused on his fight with Trump. He called Trump a liar when the president claimed Musk was upset about electric vehicle tax credit elimination, sharing a video clip from March showing Trump announcing the end of the EV mandate with Musk standing nearby.
House Democrats immediately seized on Musk's Epstein allegations. Representatives Robert Garcia of California and Stephen Lynch of Massachusetts, both seeking to become the top Democrat on the House Oversight Committee, sent a letter to Attorney General Pam Bondi and FBI Director Kash Patel requesting faster release of Epstein case files.
"I called for the full release of the Epstein Files a month ago because of my suspicion that Attorney General Pam Bondi was concealing the files to protect Donald Trump," Representative Dan Goldman of New York wrote on X. "Now my suspicion has been confirmed."
Stephen Bannon, Trump's informal adviser and longtime Musk critic, urged the president to launch multiple investigations into the world's richest man. "They should initiate a formal investigation of his immigration status, because I am of the strong belief that he is an illegal alien, and he should be deported from the country immediately," Bannon said.
Bannon also called for investigations into Musk's reported drug use and his efforts to obtain classified briefings on China from the Pentagon. He suggested Musk's top-secret security clearance should be suspended during such investigations.
Some Republicans expressed frustration with Musk's influence over congressional proceedings. Representative Don Bacon of Nebraska blamed Musk for derailing a bipartisan spending deal in December. "In December, we had a really good CR bill – and when he spoke up, everyone just ran," Bacon said. "We had a lot of good stuff in there. I sort of blame him for that disaster."
The feud raises immediate concerns about America's space capabilities. NASA currently has few alternatives to SpaceX for crucial missions. Boeing's Starliner capsule remains grounded after a test mission left two NASA astronauts stranded in orbit for nine months before they returned via SpaceX's Dragon. Northrop Grumman's recent Cygnus cargo mission was scrapped after the spacecraft was damaged during shipment.
In response to Trump's contract threats, Musk initially said SpaceX would "immediately" decommission its Dragon spacecraft. However, he later walked back the threat after receiving advice from social media users. "Good advice," he wrote. "Ok, we won't decommission Dragon."
If SpaceX were to follow through on decommissioning Dragon, NASA would face an immediate crisis. The space agency would likely need to reduce the International Space Station crew to three astronauts who could fit in a Russian Soyuz capsule, and potentially resume purchasing seats from Russia as it did between the space shuttle retirement and Dragon's debut.
The breakdown also threatens NASA's lunar ambitions. SpaceX has a contract to build a version of its Starship rocket to take astronauts to the moon's surface during the Artemis III mission. Without SpaceX, the current timeline for returning Americans to the moon would collapse.
The relationship between the two men underwent a dramatic reversal from recent weeks when Musk served as a close White House adviser leading the Department of Government Efficiency. As recently as Friday, Trump gave Musk a ceremonial oversized key to the White House during a farewell event in the Oval Office.
Some observers attempted to mediate the dispute. Hedge fund billionaire Bill Ackman posted that Musk and Trump "should make peace for the benefit of our great country. We are much stronger together than apart." Musk responded: "You're not wrong." Even Kanye West weighed in, posting "Broooos please noooooo" with a hugging emoji.
However, the personal nature of the attacks and serious allegations made by both sides suggest the damage to their relationship may prove irreparable, with far-reaching consequences for American space exploration, electric vehicle policy, and the broader political landscape.
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