(Bloomberg) -- When Elon Musk and Donald Trump joined forces during the presidential campaign, there was always a question over how long their alliance would last and who would prevail if it didn’t work out.
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After the public spat between the world’s richest man and its most-powerful leader spun out of control on Thursday, the answer was clear: It was Musk who eventually backed down when Tesla Inc.’s stock price tanked and his net worth crumbled by $34 billion. The damage to Musk’s business empire will be difficult to repair — with Tesla’s stock up only about 4% soon after the market’s open, recouping just some of its previous day’s slide.
After the fight wiped a record $153 billion from the market value of the electric carmaker Thursday and dragged down broader indexes, it became clear how much Musk had to lose. And he blinked, pulling back from a threat to idle SpaceX’s astronaut-carrying vehicle and heeding online advice to stand down from his attacks. At various points Musk claimed credit for Trump’s victory, endorsed his impeachment and even suggested the president was implicated in the sex crimes of Jeffrey Epstein.
By 9:20 p.m., Musk had calmed, telling a user on his X platform that cooling off for a couple of days was “good advice.” Still, it wasn’t clear Trump shared that view.
While there were signs Musk was looking for an off-ramp, including a Politico report that Trump staffers were working on arranging a call with the billionaire, a senior White House official said no call is in the works for Friday — and suggested that the proposal for a call came from the tech entrepreneur.
And in a sign Trump is still fuming over the spat, the official said the president is considering getting rid of a Tesla vehicle he obtained during a White House event staged to show solidarity with the automaker at a time when dealerships were facing protests and vandalism.
Musk did not immediately respond to a request for comment.
The conflict marks a turning point in a relationship that defined the first several months of Trump’s return to office, when Musk and his small band of young techie coders raced through the government, seeking to slash spending, shutter agencies and cut the federal workforce. It also sends a warning shot to other billionaires who recently threw their support behind Trump, reminding them of the danger of crossing a president who is known to carry a grudge.
Musk’s so-called Department of Government Efficiency seemed to embody Trump’s pledge to radically shrink the size of the government and act by executive order, circumventing Congress’ constitutional power over the purse strings. The effort ultimately fell short of its goal of cutting $1 trillion from the budget by ferreting out government waste — mustering just $180 billion of savings, by its own accounting.
But when Musk left his role late last month, the two appeared on good terms at an Oval Office press conference, where Musk said he expected to remain a friend and adviser to the president.
The tension began when Musk started attacking Trump’s signature legislation, the so-called “big beautiful bill” that would extend the Republican’s first-term tax cuts and tack on some new ones. To offset some of the cost, it also included spending cuts, including the elimination of a $7,500 tax credit for electric-vehicle buyers that JPMorgan Chase & Co. analysts estimate would deal a hit of roughly $1.2 billion to Tesla’s full-year profit.
Musk, who was also upset by Trump’s decision to withdraw the nomination of his associate Jared Isaacman to lead the National Aeronautics and Space Administration, started using his social-media feed to urge senators to kill the tax bill, calling it an “disgusting abomination” that would worsen the deficit and add to the national debt.
The opposition left Republican lawmakers in the awkward position of choosing sides between Musk, who has quickly become a key financial backer for the party’s political efforts, and Trump, the singular political force who has reshaped the party in his image.
Musk’s position, though, was largely waved off by the White House as a difference of opinion until the moment when Trump was asked about Musk’s lobbying during a televised meeting in the Oval Office with German Chancellor Friedrich Merz.
“I’m very disappointed in Elon. I’ve helped Elon a lot,” Trump said during the meeting. “He said the most beautiful things about me, and he hasn’t said bad about me personally, but I’m sure that’ll be next.”
It was then that a remarkable scene began to unfold. Musk started to rebuke Trump, firing off rebuttals on social media as the president spoke.
“Such ingratitude,” Musk posted, citing his financial support for Republicans during the 2024 election. “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”
The two went on to argue about the nature of Musk’s departure from the White House. “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!,” Trump posted.
Musk responded that Trump’s claim he was asked to leave was “such an obvious lie” and “so sad.”
It continued to escalate. Musk floated the idea of creating a new political party “that actually represents the 80% in the middle” and continued to egg Trump on after the president threatened to cut off government contracts for Musk’s companies. That would pose a major hit to Musk, since SpaceX and Tesla have received is $22.5 billion from federal unclassified contracts since the 2000 fiscal year, according to Bloomberg Government data.
Musk appeared unconcerned about the financial risk of angering Trump. He responded “yes” to an X user’s suggestion Trump be impeached and replaced by Vice President JD Vance and argued that the president’s tariff regime would tip the country into a recession. Musk also needled Trump over his past relationship with Epstein: “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!” Musk wrote.
The White House declined to comment on the Epstein accusation.
On Wall Street, the reaction was swift and punishing. A selloff in Tesla stock built as the two traded barbs, driving it down at once point as much as 18%, before paring the loss slightly by the end of the trading day.
Several people in the party with ties to both Trump and Musk — as well as random social-media posters — tried to find a quick off-ramp for hostilities and clear a pathway to peace.
By late afternoon, with the power Trump wields threatening to wipe out a good chunk of Musk’s wealth, the message finally started to sink in.
In a reply to billionaire Bill Ackman, an ally of both Trump and Musk who said they should “make peace for the benefit of our great country,” Musk responded: “You’re not wrong.”
(Updates to add details from White House official in paragraphs 5-7)
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