Will Musk's Feud with Trump Boost or Break His Empire?

As Musk clashes with Trump and Tesla’s stock tumbles, investors are left questioning whether tech’s most polarizing visionary has lost his focus—and his fire.

Just weeks ago, Elon Musk announced he was stepping back from politics—a statement that sparked cautious optimism across Wall Street. Investors hoped that the world's most talked-about CEO would turn his full attention back to the companies he leads, particularly Tesla, which is at a crucial crossroads.

But instead of a renewed business focus, Musk ignited a fresh political firestorm—this time targeting former President Donald Trump. His explosive remarks and online tirades have not only strained federal relationships but also sent Tesla’s stock into a 14% nosedive, forcing a hard rethink of his leadership direction.

A Crash in Confidence: Tesla Shares Plunge

On Thursday, Musk went on a now-viral social media spree, publicly criticizing Trump in what appeared to be a deeply personal spat. Investors didn’t react kindly. Tesla shares plummeted 14% in a single day, reflecting a growing fear that Musk’s attention is dangerously divided.

Though shares rebounded slightly on Friday amid signs of easing tensions, the episode served as a stark reminder that Musk’s personality and decisions are inextricably linked to Tesla’s market valuation.

“For months, investors have wanted him off his phone and back at work. This isn’t what they meant,” noted one analyst.

Federal Fallout: The Boycott Threat

Compounding the crisis is the potential loss of federal support. Following Musk’s attacks, the Trump-aligned government hinted at reviewing contracts and subsidies tied to Musk’s companies—including SpaceX and Tesla, which have long benefited from government partnerships.

For a company still dependent on federal support for its EV infrastructure and clean energy credits, this development could have far-reaching financial implications.

Tesla’s Bigger Problem: Losing the Race to Autonomy

As political tensions dominate headlines, some experts warn that Tesla’s real crisis is technological, not political.

“Tesla’s finished,” said tech journalist Kara Swisher at the San Francisco Media Summit. “They could have competed in the autonomous space, but they’re way behind.”

Tesla has long trailed behind Waymo, Alphabet’s autonomous driving unit, which already operates self-driving taxis in multiple cities. In contrast, Tesla’s much-hyped autonomous fleet—particularly the Model Y robo-taxis in Austin—remains in testing, with no public launch to date.

This month was supposed to mark a breakthrough. Musk claimed on X that Tesla had begun testing driverless Model Y vehicles, and analysts called it a “watershed moment.”

But the spotlight is now on Musk’s tweets, not his tech.

The $1 Trillion Question: Does Elon Still Care?

More troubling than the feud—or even the tech lag—is a rising question within Silicon Valley: Does Musk still care about Tesla's original mission?

“He’s a really powerful person when he’s focused,” said Ross Gerber, CEO of Gerber Kawasaki Wealth. “But this feels like he’s trying to prove power, not products.”

Once hailed as the underdog innovator who proved the world wrong with EVs and reusable rockets, Musk now appears more focused on political debates and ideological battles. This shift in focus has caused long-time investors like Gerber to pull back on their holdings, citing an increasing risk tied to Musk’s unpredictability.

“It was about proving he could make EVs. Now it’s about proving he’s bigger than the president. That’s not a winning strategy,” Gerber said bluntly.

Final Thoughts: Can Tesla Withstand a Distracted CEO?

Tesla’s identity and valuation have always been tightly tethered to Elon Musk’s charisma and vision. But as that vision blurs with political vendettas and public feuds, the faith investors once had is showing cracks.

The real threat isn’t just a falling stock or federal cold shoulder—it’s the potential that Musk may no longer be focused, motivated, or interested in finishing the mission he started.

As the robo-taxi launch looms and competitors race ahead, Tesla’s future depends not just on the next product drop—but on whether its CEO can put the phone down and look forward.