TLDR;
- Elon Musk apologized for his recent social media remarks about Donald Trump, attempting to de-escalate a growing political feud.
- Tesla shares fell sharply after Musk’s posts, continuing a pattern where his online behavior influences market performance.
- The spat raised concerns over government contracts tied to Musk’s companies, particularly SpaceX.
- Analysts warn that Tesla’s brand may be suffering from Musk’s increasingly political public image.
Elon Musk issued a public apology on June 11 for a series of social media posts aimed at former President Donald Trump, attempting to calm a controversy that sparked political tension and triggered a sharp decline in Tesla’s stock value.
Musk Backs Off After Trump Clash
Using his platform X, Musk admitted that his earlier comments had gone too far and expressed regret for his remarks, which included inflammatory allegations and calls for Trump’s impeachment.
The conflict emerged after Musk openly criticized the Trump-backed “One Big Beautiful Bill Act,” arguing that the proposed legislation would balloon the national deficit. Musk’s posts, now deleted, included one that linked Trump to controversial figures and another that hinted at Vice President JD Vance taking over the presidency. The backlash was swift, both politically and financially.
I regret some of my posts about President @realDonaldTrump last week. They went too far.
— Elon Musk (@elonmusk) June 11, 2025
Tesla Shares Reel from the ‘Musk Effect’
As the online feud played out, Tesla’s share price dropped by 14%, continuing a recurring pattern where Musk’s personal conduct rattles investor confidence. Market analysts have long observed how Musk’s social media behavior moves markets, especially in relation to Tesla. This latest controversy contributed to the company losing its ninth-place spot among the world’s most valuable companies, slipping to tenth as its market value plunged nearly 30% in 2025.
Investors reacted strongly not just to Musk’s statements, but to the risk they introduced. The possibility of the federal government re-evaluating contracts with Musk’s companies, including SpaceX, added to the market volatility. Although such an abrupt reversal in federal support is unlikely, the specter of strained relations with Washington made investors uneasy.
Billions in Federal Contracts Now Under Scrutiny
Behind the headlines lies a deeper issue, the immense financial entanglement between Musk’s companies and the federal government. SpaceX, which provides key launch services for NASA and the Department of Defense, stands to gain over $30 billion in contracts in the coming years. Tesla, meanwhile, benefits from significant federal and state-level subsidies aimed at supporting electric vehicle adoption.
JUST IN: Elon Musk taunts Trump to end his contracts with the federal government, suggests it would end the International Space Station.
Trump: "The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and… pic.twitter.com/kfDd9Nl8vI
— Collin Rugg (@CollinRugg) June 5, 2025
The feud with Trump brought that relationship into the spotlight, with political figures hinting at potential contract cuts. While such moves remain speculative, the market response suggests growing concern that political missteps could jeopardize lucrative partnerships that underpin the long-term viability of Musk’s ventures.
Musk’s Persona Becomes a Double-Edged Sword
Once hailed as a visionary genius whose boldness inspired Tesla’s meteoric rise, Musk’s image is now increasingly polarizing. His forays into partisan political commentary have alienated parts of the public and shaken confidence in his leadership. In Europe, Tesla sales have already seen a steep decline this year, partly attributed to reputational fallout surrounding Musk’s public behavior.
That said, what once served as Tesla’s most valuable marketing tool, its CEO’s personality, now appears to be a liability. The “Musk effect” has become a cautionary tale for investors and analysts who must weigh not only corporate fundamentals but also the unpredictability of the man behind the brand. While Musk’s apology may cool tensions for now, the episode has reinforced just how tightly Tesla’s fate remains tethered to his actions.
