Tesla loses $100 bn in market cap as Elon Musk drops 'Epstein' bomb on Trump; how the feud turned ugly

The simmering tensions between US President Donald Trump and Tesla CEO Elon Musk exploded into a public spectacle Thursday, sending Tesla shares into a nosedive that wiped out more than $100 billion in market value after Musk accused the president of being named in the Jeffrey Epstein files.

The extraordinary feud between the world’s richest man and the US president unfolded in real time across the social media platforms they own, shaking both Wall Street and Washington.

The verbal sparring began after Trump, during a White House meeting with German Chancellor Friedrich Merz, publicly criticised Musk for attacking the administration’s sweeping tax cut and spending legislation. The president lamented their frayed relationship, saying, “I’m very disappointed with Elon.”

“I would have won Pennsylvania regardless of Elon,” Trump said from the Oval Office.

Musk responded within minutes on X, the social media platform he owns, claiming: “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”

Federal Election Commission filings show Musk poured over $290 million into the 2024 election cycle, backing a slate of Republican candidates.

The clash escalated further when Trump took to his own social platform, Truth Social, suggesting Tesla’s lucrative federal subsidies and contracts should be cut.

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump posted. “I was always surprised that Biden didn’t do it.”

Moments earlier, the president claimed he had personally asked Musk to leave the White House, and that the Tesla CEO “just went CRAZY!”

“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY,” the president said.

To be sure, there is no federal mandate requiring the purchase of electric vehicles.

Musk then issued a stunning accusation, posting on X: "Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!"

The explosive claim triggered immediate market fallout. Tesla shares, already down 9% after Trump’s initial remarks, plummeted further as investors reacted to Musk’s Epstein allegation and the potential threat to Tesla’s federal contracts.

The sell-off erased over $100 billion in market capitalisation.

Musk, who just days ago held a special government advisory role within the Trump administration, has recently become a vocal critic of Trump’s signature legislation dubbed "One Big Beautiful Bill."

The House-passed bill would phase out the $7,500 electric vehicle tax credit by the end of 2025. According to a Bloomberg report, Musk personally lobbied House Speaker Mike Johnson to preserve the credit.

On Wednesday, Musk blasted the legislation on X as a “disgusting abomination” and urged Americans to pressure their representatives to kill what he dubbed the “Debt Slavery Bill.”