A war of words between Donald Trump and Elon Musk erupted this week, rattling both political and market watchers and sending Tesla shares tumbling. The spat, which began with sharp remarks from the former US president at a campaign rally, quickly escalated after Musk fired back on social media. Investors reacted swiftly, knocking Tesla’s valuation down by over 4% on the day of the exchange.
During a rally in Arizona, Trump dismissed Musk as “another BS artist,” citing what he described as broken promises, including a claim that Musk had told him he voted for Trump in the past. Trump’s remarks came just hours after news emerged that Musk may be leaning away from supporting the Republican frontrunner in the 2024 presidential race.
Musk responded with his usual bluntness on X, formerly Twitter, calling Trump’s behaviour “erratic” and “unhelpful.” He added, “It’s time for new leadership. We don’t need a cult of personality.” Musk has previously voiced support for centrist or libertarian policies, and although he has occasionally aligned himself with conservative values, he has never firmly endorsed Trump.
The exchange sparked an immediate market reaction. Tesla’s share price dropped nearly 5% in intraday trading on Tuesday, closing down 4.2% as concerns mounted over Musk’s growing political visibility and potential distractions from core business operations. Analysts suggested that Musk’s high-profile political interventions, particularly when clashing with someone as divisive as Trump, could alienate parts of Tesla’s consumer base or invite regulatory scrutiny if Trump were to return to power.
Tesla has had a turbulent year, facing challenges ranging from slowing EV demand in China and Europe to heightened competition from legacy carmakers and startups alike. Investor sentiment has already been shaky, and any disruption to Musk’s public image tends to have a magnified effect on the company’s market performance.
Wall Street firms were divided on whether the spat would have long-term consequences. While some described the sell-off as a temporary emotional reaction, others warned that Musk’s growing entanglement with US political battles may erode confidence in Tesla’s strategic focus.
For now, the feud underscores the risks that come when celebrity CEOs blur the line between business leadership and political commentary. Both Trump and Musk command outsized influence in their respective spheres, and when they clash, the consequences can be felt far beyond the headlines.
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