Tesla Share Crash Wipes Out Rs 12 Lakh Crore, Loss Exceeds TCS Valuation After Elon Musk–Trump Dispute
Elon Musk’s Tesla Loses Value Equal to Entire TCS as Shares Crash 14% Amid Trump Dispute, Rs 12 Lakh Crore Wiped Out
Elon Musk’s electric vehicle giant Tesla faced a massive financial blow on Thursday as its shares plunged by over 14%, wiping out nearly $150 billion (around Rs 12 lakh crore) in market capitalization. The loss in Tesla’s market value was so significant that it surpassed the entire valuation of Tata Consultancy Services (TCS), India’s largest IT firm and one of the most valued companies in Asia. As of Thursday’s market close, TCS stood at $142 billion, making the Tesla plunge a staggering event in global markets, highlighting the profound impact of political tensions on corporate valuations.
The crash followed escalating tensions between Elon Musk and former U.S. President Donald Trump. The sharp decline came shortly after Trump criticized Musk publicly over social media, suggesting the possibility of terminating federal subsidies and government contracts awarded to Musk’s companies, including Tesla and SpaceX. Trump’s post on his social platform, Truth Social, stated, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
This political fallout traces back to Musk’s controversial statement claiming that Trump would not have been elected president without his support. This remark appears to have soured the relationship between the two billionaires, with Trump now signaling potential policy retaliation. Investors are growing increasingly worried that Trump’s actions, if he returns to office, could severely affect Tesla’s and SpaceX’s access to government contracts, particularly those related to cutting-edge technologies like autonomous vehicles and space exploration.
Tesla’s stock had recently been on an upward streak, thanks in part to Musk’s announcement about launching a robotaxi service in Austin, Texas. The initiative aimed to deploy self-driving taxis in up to 25 cities by next year. However, Trump’s latest threats have injected uncertainty into the future of Tesla’s autonomous driving ambitions. Analysts now fear that regulatory hurdles under a Trump-led administration could delay or derail these ambitious plans. “There is a fear that Trump is not going to play Mr. Nice Guy when it comes to autonomous,” noted Dan Ives, a respected analyst at Wedbush Securities.
The impact of Trump’s rhetoric may be even more pronounced on SpaceX, Musk’s privately held space company. SpaceX has secured billions in contracts from NASA for missions to the International Space Station and the development of a mega-rocket to return U.S. astronauts to the moon. The threat of losing these contracts has raised concerns among investors, especially considering the company’s growing valuation, which recently hit $350 billion in a private share sale—up dramatically from $210 billion the previous year.
Interestingly, Musk had appeared alongside Trump during a recent Middle East visit where Saudi Arabia approved the use of Starlink, SpaceX’s satellite internet service, for aviation and maritime operations. While some analysts speculate that Musk’s international deals in countries like India, Pakistan, and Bangladesh may have been timed to counterbalance domestic political pressures, the broader geopolitical risks are adding more volatility to his business empire.
Tesla’s shares, which initially surged after Trump’s election due to expectations of a business-friendly environment, are now under pressure from the very political forces that once propelled them. The stock had reached an all-time high on December 17, before slipping during Musk’s involvement with government advisory roles. Investors had recently regained confidence after Musk promised renewed focus on Tesla and its autonomous vehicle roadmap. However, Thursday’s dramatic fall has cast doubt over the stability of that trajectory.
As Tesla’s market capitalization suffered a loss greater than that of India’s IT giant TCS, the event serves as a stark reminder of how political dynamics can sway investor sentiment and shake even the most dominant players in global markets.
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