Tesla already had big problems. Then Musk went to battle with Trump

Tesla has been facing massive challenges trying to get back on track after a disastrous first quarter. Those headwinds strengthened considerably this week.

CEO Elon Musk officially concluded his term with the Trump administration at the end of May, hitting the 130-day mark, the maximum time allowed for a “special government employee.” On his way out the door, Musk expressed sharp criticism of the Trump’s signature spending bill that’s being debated in Congress due to its expected impact on the national debt.

What started 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 end government contracts and cut off subsidies for Musk’s companies. Musk responded, “Go ahead, make my day.”

The rift sent Tesla shares plummeting 14% on Thursday, wiping out roughly $152 billion in value, the most for any day in the company’s 15 year-history on the public market. While Musk is still the richest person in the world on paper, his net worth plunged by $34 billion, according to Bloomberg’s Billionaires Index.

More importantly, the spat brought about the collapse to a relationship that blended business, politics and power in a manner virtually unprecedented in U.S. history. The ramifications to Tesla, which fell out of the trillion-dollar club on Thursday, could be severe, and not just because Trump is reportedly considering selling or giving away the red Model S he purchased in March after turning the White House lawn 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 everything from future regulation, investigations and government support for Tesla, to decisions on tariff exemptions the company has been seeking in order to purchase Chinese-made manufacturing equipment.

Tesla shares were badly underperforming the broader market before the Musk-Trump breakup. Revenue slid 9% in the first quarter from a year earlier, with auto revenue plummeting 20%, due to the combination of increased competition from lower-cost EV makers in China and a consumer backlash to Trump’s political activities and rhetoric.

It’s certainly not what Tesla shareholders were expecting, when they sent the stock up about 30% in the days following Trump’s election victory in November. After spending close to $300 million to return Trump to the White House, Musk was poised to have a major role in the administration and be in position to push through regulatory changes in ways that benefited his companies.

Instead, his company has suffered, and Musk’s behavior is largely to blame.

One of 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 more 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 were numerous cases of vandalism or arson of Tesla facilities or vehicles in the U.S., as well as waves of peaceful protests at Tesla stores and service centers in North America and Europe.

Advertisements in protest of Musk have appeared in New York’s Times Square, and at bus shelters in London, urging people to boycott Tesla, some labeling the company’s EVs as “swasticars.” The Vancouver International Auto Show even removed Tesla from its exhibitors’ list fearing the company’s presence would cause safety problems.

On top of that are 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 refrained from promising growth this year and said it will “revisit our 2025 guidance in our Q2 update.”

Pension funds that invest in Tesla have said the “crisis” at the company requires a leader to work a minimum of 40 hours per week to focus on solving its problems.

Public officials are echoing that sentiment, and calling on Tesla’s board to take action.

New York City Comptroller Brad Lander…