Investing.com -- Tesla (NASDAQ:TSLA) plunged Thursday following President Donald Trump’s public criticism of CEO Elon Musk and threats to pull some of his companies’ government contracts, indicating a major falling out between the two, who up until recently were close allies. Trump expressed disappointment in Musk amid their disagreement over the Trump-backed spending bill in Congress. Musk hit back, accusing Trump of lying.
Shares of Tesla closed down 14.3% after trading down as much as 18% intraday.
Trump’s comments follow Musk’s criticism of the "big beautiful bill", which the tech billionaire called a "disgusting abomination" given the level of pork in the bill. The president stated that Musk was only upset because an electric vehicle (EV) mandate was removed from the bill. Trump also suggested that Musk had been fully aware of the bill’s details before expressing his disapproval, hinting at a potential personal rift to come.
"I’m very disappointed with Elon," Trump said in comments with reporters. "I’ve helped him a lot. He knew the inner workings of the bill better than anybody sitting here. He had no problem with it. All of a sudden he had a problem, and he only developed the problem when he found out we’re going to cut the EV mandate."
Later, on his Truth Social media platform, Trump said he asked Elon to leave after he was "wearing thin." After that, Trump said, Elon "went crazy."
Trump also threatened to terminate Musk’s governmental subsidies and contracts.
"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts," Trump stated. "I was always surprised that Biden didn’t do it!"
Musk hit back against Trump’s assertions that he had an issue with the removal of the EV mandate, with multiple posts on his social media platform X.
"Whatever," Musk said on X, "Keep the EV/solar incentive cuts in the bill, even though no oil&gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill."
"In the entire history of civilization, there has never been legislation that both big and beautiful," Musk added. "Everyone knows this! Either you get a big and ugly bill or a slim and beautiful bill. Slim and beautiful is the way."
Following Trump’s social media post, Musk said, "Such an obvious lie. So sad."
Musk later added that the reason the Epstein files have not been made public is because Trump is in them. "Have a nice day, DJT!," Musk said sarcastically.
Amid Trump’s threat to pull Musk’s government contracts, Musk said, "SpaceX will begin decommissioning its Dragon spacecraft immediately."