U.S. President Trump and Tesla CEO Musk publicly clashed over electric vehicle policies, leading Tesla's stock to plummet by 14.26% at the close of trading on the 5th, down to $284.7. The market value evaporated by $153 billion (approximately 647.4 billion Malaysian ringgit) in one day, marking the largest single-day drop since last year's 'Tesla protest wave.'
Earlier, Musk criticized Trump's recent budget proposal for 'ending subsidies for electric vehicles,' to which Trump quickly retaliated, saying that Musk is displeased due to 'losing government benefits.'
Forbes estimates that the controversy has reduced Musk's personal wealth by $27 billion to $388 billion.
Investors are concerned that this political storm will hinder Tesla's Robotaxi plan. The U.S. National Highway Traffic Safety Administration (NHTSA) is currently investigating whether Tesla's 'full self-driving' software is involved in fatal accidents. If regulators mandate that autonomous vehicles must be equipped with radar and other sensing devices, Tesla, which relies on camera solutions, will face technical adjustment pressures.
American securities firm Wedbush analyzed that self-driving and AI businesses originally provided Tesla with $1 trillion valuation support, but if regulation trends unfavorably, the company's valuation will be reassessed.
Currently, the Trump administration has proposed to completely eliminate the $7,500 electric vehicle purchase subsidy by the end of 2025, while also reducing California's clean energy sales targets, potentially reducing Tesla's annual profits by $1.2 billion. Additionally, $2.2 billion in regulatory credit sales revenue will also be impacted, and it has also led to a crash in Musk's favored Dogecoin (DOGE).
Despite stock fluctuations, Tesla's market value still reaches $1 trillion, far exceeding the world's second-largest automaker Toyota (about $290 billion). However, its current stock price is equivalent to 150 times the forecasted future earnings, significantly higher than valuation levels of large tech stocks like Nvidia, prompting some fund managers to question its fundamental support.