Tesla is having a rough 2025. The company’s market value has dropped a staggering $380 billion, the largest loss for any big company this year.
This comes as electric vehicle demand cools and CEO Elon Musk’s public fights, especially with former President Donald Trump, weigh heavily on the stock.
So what does this mean for everyday investors or Tesla fans? Well, it’s a bumpy ride. Share prices are down nearly 30%, making Tesla the worst-performing large-cap stock in 2025. And this rollercoaster is about more than just cars — it’s about politics, ego, and big business clashing on a public stage.
On Thursday, Tesla shares tanked after Trump threatened to cut government contracts with Musk’s companies.
The feud ignited when Musk slammed Trump’s tax and spending bill, which aims to kill the popular $7,500 EV tax credit by the end of 2025. Trump fired back on social media, warning that his administration might pull contracts from SpaceX and other Musk ventures.
The stock took a nosedive, wiping more than $150 billion off Tesla’s value in a single day — one of the biggest drops ever. Short sellers — those betting Tesla shares would fall — made nearly $4 billion from the chaos. Ouch.
But not all is lost. On Friday, Tesla shares bounced back about 5% in early trading.
Why? White House aides stepped in to calm things down and schedule talks between Musk and Trump. Musk even hinted on X (formerly Twitter) that he might ease the tension.
Here’s the kicker: Tesla’s stock still trades at a wild 120 times expected earnings, way above other automakers and tech giants like Nvidia. Investors are clearly torn — excited about Tesla’s futuristic robotaxis but worried about Musk’s political drama and weak sales.
Analysts say the Musk-Trump spat is more noise than actual threat. City Index analyst Fiona Cincotta said these threats probably won’t go anywhere serious. “It’s just a war of words that will die down soon,” she noted.
Still, the political heat creates real risks. Government regulators control key rules on Tesla’s robotaxis — like whether cars can ditch pedals and steering wheels. If relations sour, Tesla could face bigger hurdles.
This story is a sharp reminder that big business isn’t just about products and profits. It’s also about personalities, politics, and public opinion. Tesla’s 2025 market wipeout shows how much CEOs’ actions outside the boardroom can shake investors’ confidence.
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