On June 3, 2025, two of America’s most influential figures—Billionaire entrepreneur Elon Musk and former President Donald Trump—clashed on social media over politics, policy, and personal jabs. Within hours, Tesla’s share price plunged by more than 12%, wiping out over $150 billion in market capitalization in the single largest one-day loss ever for a U.S. publicly traded company. For Tesla owners, shareholders, and EV enthusiasts in Europe and North America, this unprecedented market turbulence raised urgent questions: How did a few tweets translate into such an extreme market reaction? And what does it mean for Tesla’s brand reputation, investor sentiment, and long-term strategic outlook? In this deep dive, we unpack the background of the feud, the mechanics of the stock slide, and the lessons analysts and car owners alike should draw about politics and business in the age of social media.
1. Background: Musk and Trump’s Complicated History
Elon Musk and Donald Trump have enjoyed a mixed, often contradictory relationship over the past decade. Musk served briefly on Trump’s economic advisory councils after the 2016 election but resigned in 2017 over the U.S. withdrawal from the Paris Climate Accord—a blistering critique that cemented his image as a global environmental advocate. In the years since, Trump has publicly struggled with how to characterize Musk, sometimes praising his wealth and ingenuity, other times mocking his political stances. Meanwhile, Musk’s freewheeling tweets—ranging from Tesla product updates to geopolitical observations—have increasingly drawn Trump’s ire.
By early 2025, tensions simmered as Musk hinted in a press conference that he might consider supporting Democratic initiatives on climate policy, prompting Trump to accuse him of “selling out our country.” Musk responded by mocking Trump’s claims of economic prowess and criticizing his handling of infrastructure and energy independence. This backdrop of mutual barbs set the stage for the viral feud of June 3.
2. Anatomy of the Twitter War
The feud ignited when Trump tweeted that Musk’s support for certain renewable energy subsidies amounted to pandering to liberal elites. Musk fired back with a series of tweets questioning Trump’s competency on infrastructure, sarcastically referencing the “Make America Drainpipe Again” slogan. Within minutes, mainstream media outlets grabbed the story, framing it as a battle of billionaire egos rather than a policy debate.
Key exchanges included:
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Trump’s Claim: “Musk only cares about subsidies and tax breaks—no real patriot.”
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Musk’s Rejoinder: “I build rockets and electric cars; your administration built tweets.”
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Trump’s Follow-up: “Maybe Tesla should build a MAGA edition—bright red, gold hats included.”
The rapid-fire nature of the back-and-forth ensured the feud dominated trending topics for hours. Financial news networks ran live coverage dissecting each tweet, while Tesla owners on club forums debated whether Musk’s snark was justified or reckless. Institutional investors, already jittery about rising interest rates and supply-chain constraints, saw the tweets as a volatile external shock.
3. The Stock Plunge: Data and Market Dynamics
When U.S. markets opened the next morning, Tesla shares gapped down by 8% in the first five minutes of trading. By midday, the slide had deepened to 12.3%, equating to roughly $152 billion in lost market cap. For context, that single-day plunge surpassed the 2015 crash after Musk’s Model X delays and rivaled losses seen during the 2020 pandemic sell-off.
Several factors compounded the severity:
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Retail Investor Herding: Social-media-driven panic selling amplified the initial drop, as individual investors feared further attrition.
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Stop-Loss Cascades: Automated trading algorithms triggered stop-loss orders, mechanically unloading shares as prices fell through key technical levels.
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Institutional Rebalancing: With Tesla briefly falling out of the S&P 500’s top-ten components by market cap, some index-tracking funds had to rebalance, accelerating the sell-off.
Beyond immediate market flows, analysts warned of potential knock-on effects: higher borrowing costs for Tesla’s commercial paper, delays in factory expansions as capital raises became more expensive, and a dent in employee morale at Gigafactories worldwide.
4. Brand and Reputation Management
Tesla’s marketing has long relied on Musk’s personal brand—his tweets, public appearances, and grand visions for Mars colonization. But when those same tweets trigger a multi-billion-dollar rout, brand stewards must act swiftly. Over the following 48 hours, Tesla’s corporate communications team:
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Issued a Brief Statement: Acknowledged the market volatility was driven by “unrelated social commentary” and reaffirmed confidence in long-term fundamentals.
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Coordinated Press Tours: Arranged interviews for other C-suite executives (e.g., CFO Vaibhav Taneja) to emphasize steady delivery timelines and upcoming product launches.
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Enhanced Social Listening: Deployed AI-powered tools to track sentiment across owner forums and X (formerly Twitter), identifying pockets of concern to address proactively.
The swift response aimed to reassure both retail and institutional stakeholders, but many noted that damage control remains incomplete until Musk himself clarifies his strategy for separating personal politics from Tesla’s corporate direction.
5. Expert Perspectives and Outlook
Market strategists offered mixed views: some framed the drop as a buying opportunity—Tesla’s underlying demand and technology lead remain intact—while others cautioned that Tesla’s overreliance on Musk’s personal brand introduces ongoing tail-risk. Key takeaways include:
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Valuation vs. Fundamentals: With shares trading at a forward P/E ratio above 40×, any external shock can prompt outsized moves.
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Governance Concerns: Heightened scrutiny on Musk’s dual role as CEO of Tesla and SpaceX, and his political activism, may spur calls for more independent board oversight.
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Investor Diversification: Advisers recommend Tesla owners balance equity stakes with more defensive positions in the broader EV and clean-energy supply chain.
6. Conclusion
The Musk-Trump Twitter war offers a cautionary tale about the convergence of politics, personality, and markets in the digital age. For North American and European Tesla car owners—and anyone invested in the electric-vehicle revolution—the incident underscores the importance of distinguishing between headline-driven noise and sustainable business drivers. While Tesla’s long-term path to global electrification remains compelling, this episode reminds stakeholders that the company’s fortunes can pivot dramatically on a single tweet. As the dust settles, prudent investors and EV enthusiasts should monitor Musk’s public communications, Tesla’s delivery cadence, and evolving governance structures to navigate future shocks with greater resilience.
