Tesla shares in free fall: Dispute between Elon Musk and Donald Trump escalates

New York. The escalating dispute between Elon Musk and US President Donald Trump has sent Tesla's stock plummeting. The shares of the electric car manufacturer led by Musk lost more than 14 percent in US trading. The financial service Bloomberg estimated that Musk's fortune fell by nearly $34 billion to $335 billion (approximately €293 billion) in one day.

On Thursday, Trump spoke, among other things, about withdrawing government subsidies and contracts from Musk's company. Musk also runs the space company SpaceX, on which the US currently relies for astronaut flights and military rocket launches.

The rift between Musk and Trump was triggered by a dispute over the tax and budget bill pushed by the US president. Musk is calling for more drastic spending cuts and warning of a spiraling budget deficit. Trump, however, suggested that Musk was only stirring up sentiment against the bill because it would cut subsidies for electric cars.

Tesla's share price rose sharply after the US presidential election in November. Investors speculated at the time that Tesla would benefit from Musk's proximity to Trump. Among other things, Tesla has been the target of several investigations by the National Highway Traffic Safety Administration (NHTSA) for years. At the same time, Musk's right-wing political views scared off some potential Tesla buyers. There were repeated protests against the tech billionaire – and even arson attacks on Tesla vehicles.

For Musk personally, a sharp decline in Tesla's share price could pose a problem. The tech billionaire is known for collateralizing loans with his Tesla shares, which, at least on paper, make him by far the richest person in the world. Such deals often require additional collateral if the share price falls below certain thresholds. As the electric car manufacturer's updated annual report for 2024 reveals, Musk pledged nearly 236 million of his Tesla shares as collateral for loans.

RND/dpa