Tesla Stock Crisis: How the 2025 Musk-Trump Feud Wrecked Billions

The political fallout between Elon Musk and Donald Trump in 2025 sent Tesla's stock on a wild ride, wiping out hundreds of billions in market value. The stock, which peaked at $479 per share in late 2024, plummeted by nearly 50% by March 2025, driven by political threats and consumer backlash.

Why the Stock Tanked

This dramatic volatility wasn't a coincidence. Key factors tied directly to the political feud caused the stock's freefall:

* Threat to Subsidies: Trump's proposals to eliminate the federal $7,500 EV tax credit and revoke government contracts hit Tesla where it hurts. These subsidies are crucial to the company's profitability, and investors feared losing up to $2 billion in annual revenue.

* Consumer Backlash: Musk's political stances alienated Tesla's traditional base of environmentally conscious, progressive buyers. Global sales slumped as the brand's image shifted from a symbol of sustainability to a politically charged one.

* Leadership Distraction: Analysts and investors grew concerned about Musk's divided focus. His public political role was seen as a major distraction from his duties as CEO, adding to market uncertainty.

A Long Road to Recovery

By August 2025, the stock had partially recovered to $329.65 but remained volatile and significantly below its peak. The episode highlighted a new risk for Tesla: the political climate is now a major force shaping its market performance. The company's future hinges on its ability to navigate these political headwinds and regain investor confidence.