Tesla shares plunge 14% as Trump-Musk rift intensifies

Trump suggests cutting government contracts and subsidies for Musk's companies

Tesla shares fell more than 14 per cent on Thursday, as the rift between Donald Trump and chief executive Elon Musk grew over the US President's tax bill.

The two billionaires dismantled large parts of the federal government during Mr Trump's first four months in office, but are now sparring over the contents of a Republican-led budget that is being debated by politicians in Congress.

“Elon and I had a great relationship. I don’t know if we will any more,” Mr Trump said in the Oval Office. “I was surprised.”

While he was speaking, Mr Musk sent out a series of posts on his X social-media platform critical of Mr Trump and the bill, called the “One Big Beautiful Bill Act”.

“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” Mr Musk wrote on X, which he bought in 2022.

Shares in Tesla closed 14.27 per cent lower to $284.68 a share, with the company's market capitalisation falling below the $1 trillion mark to $917 billion.

Stock in Trump Media fell 8.04 per cent to $20.12 a share.

Mr Musk, the world's richest man, spent about $300 million during the 2024 election to support Mr Trump and other Republican candidates.

But Tesla, the electric vehicle maker that Mr Musk runs, is likely to be affected by the budget bill circulating through Congress. The bill would eliminate a $7,500 tax credit for electric vehicles by the end of this year.

“Elon was 'wearing thin.' I asked him to leave,” Mr Trump posted on Truth Social.

“I took away his EV mandate that forced everyone to buy electric cars that nobody else wanted (that he knew for months I was going to do), and he just went crazy.”

Mr Musk responded by posting: “Such an obvious lie. So sad.”

Mr Trump also suggested cutting Mr Musk's government contracts and subsidies.

Mr Musk and his businesses, which includes SpaceX, has received at least $38 billion in government contracts, credits, loans and subsidies, according to an analysis conducted by The Washington Post.

He began his series of attacks against the bill, which he called a “disgusting abomination”, on Tuesday. A non-partisan analysis from the Congressional Budget Office estimated it would add $2.4 trillion to the US debt.

Mr Musk also denied a claim from Mr Trump that “he knew the inner workings” of the tax bill better than almost anyone else.

“This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it,” he tweeted on Thursday.

Mr Musk left the White House last week after coming in with plans to slash $2 trillion in federal spending. But he most recently said that the Department of Government Efficiency would save $150 billion by the end of the 2026 financial year.