The recent public dispute between Elon Musk, CEO of Tesla and SpaceX, and former President Donald Trump has marked a significant shift in their relationship. Once characterized by mutual admiration and a seemingly close alliance during the 2024 presidential campaign, their rapport has dramatically deteriorated into a war of words and personal attacks.
From Alliance to Adversity
The foundation of their prior association was strong. Donald Trump had vocally supported Musk, even defending him amid public outcry over specific policy changes affecting Tesla owners. Instances of their camaraderie included Trump showcasing his own red Tesla outside the White House, praising SpaceX’s successful launches, and their joint appearance at a UFC fight alongside CEO Dana White. Musk himself was a familiar face within the highest echelons of the Trump administration, frequently present at the White House, including the Oval Office, and even attending Cabinet meetings in his unique capacity as a special government employee. This close bond extended to Musk’s family, with his son X reportedly flying on Air Force One and often accompanying his father in the Oval Office.
The Underlying Tensions
The apparent partnership fractured when Musk publicly denounced certain administrative initiatives and harshly criticized what he termed Trump’s “One Big Beautiful Tax Bill” as a “disgusting abomination.” The former President retaliated, suggesting Musk’s ire stemmed from the cancellation of specific tax credits and a refusal to appoint his preferred NASA candidate. Musk, in turn, escalated the conflict by attempting to connect Trump to the disgraced financier Jeffrey Epstein and issuing warnings that Trump’s proposed tariffs could trigger an economic recession. This unexpected and very public spat has drawn considerable attention and speculation, with commentators like Kevin O’Leary weighing in on the catalysts behind Musk’s change of stance.
Market Reaction and Tesla’s Performance
Amidst the highly publicized verbal exchange, Tesla’s market capitalization experienced a significant downturn, dropping by over $150 billion at its lowest point. While the company’s shares managed to regain some ground following the initial shock, Tesla’s stock has faced broader challenges, with shares down nearly 20% year-to-date.
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.