**Tesla’s Market Capitalization Takes a Hit Amid Musk-Trump Feud**
Tesla’s market capitalization has faced a significant decline in 2025, largely influenced by the ongoing public dispute between CEO Elon Musk and former President Donald Trump. The conflict, which began with Musk’s criticism of government policies, has resulted in a staggering loss of nearly $380 billion for the electric vehicle (EV) manufacturer this year alone, marking it as the largest decline among major global companies.
As of June 6, 2025, Tesla’s market cap stood at $917 billion, reflecting a 29.3% drop since the start of the year. This decline has pushed Tesla from its position as the eighth-largest company globally to tenth by market capitalization. The company’s shares plummeted by over 14% in a single day following Musk’s public opposition to Trump’s proposed legislation, which aimed to eliminate federal EV tax credits—an essential incentive for Tesla’s sales.
The proposed bill could pose a $1.2 billion challenge for Tesla, which is already grappling with decreasing demand and declining profits. Analysts, including JPMorgan’s Ryan Brinkman, have expressed concerns about the company’s future as it navigates these challenges.
In March, Tesla experienced a significant market value drop of $130 billion due to rising worries about demand for its electric vehicles. Musk’s increasing involvement in political matters has raised eyebrows among investors, who fear that his focus on government roles may detract from his responsibilities at Tesla and other ventures like SpaceX and xAI.
Marketing experts have noted that Musk’s alignment with Trump’s administration may have alienated potential customers. According to US marketing professor Scott Galloway, a significant portion of the Republican demographic is unlikely to consider purchasing an EV, suggesting that Musk’s political affiliations could be detrimental to Tesla’s market appeal.
In a recent development, Tesla’s shares saw a slight rebound after White House aides reached out to Musk in an attempt to mend relations following the public spat with Trump. As of Friday, Tesla’s share price closed at $295.14, providing a glimmer of hope for investors amid the ongoing turmoil.
**FAQ**
**What factors are contributing to Tesla’s market cap loss in 2025?**
Tesla’s market cap loss in 2025 is primarily due to a public feud between Elon Musk and Donald Trump, concerns over decreasing demand for EVs, and the potential elimination of federal EV tax credits, which could significantly impact sales.
