Tesla Inc. has officially become the worst-performing large-cap stock of 2025, with its market capitalization plummeting by a staggering $380 billion since the start of the year. The electric vehicle pioneer’s dramatic downturn is attributed to a combination of political turmoil, weakening electric vehicle demand, and a highly publicized feud between CEO Elon Musk and President Donald Trump.
Tesla’s valuation, which stood at eighth globally at the beginning of 2025, has now slipped to tenth place as its market cap fell 29.3% to $917 billion.
The steepest blow came after a heated exchange between Musk and Trump, culminating in the passage of Trump’s “One Big Beautiful Bill”—legislation widely viewed as detrimental to the electric vehicle industry. The bill eliminates key tax incentives for EV manufacturers, directly impacting Tesla’s bottom line and future growth prospects.
The fallout intensified when Trump, responding to Musk’s sharp criticism of the bill on social media, publicly threatened to revoke government contracts and subsidies for Musk’s companies.
The market reacted swiftly: Tesla shares plunged 14% in a single session, erasing $152 billion in value within hours. This unprecedented drop eclipsed the entire market capitalization of some of the world’s largest companies and sent shockwaves across global markets.
Investor confidence was further rattled by Musk’s ongoing political controversies, including his associations with far-right groups and his brief, tumultuous involvement in the Trump administration. These developments, coupled with a broader decline in electric vehicle demand, have left Tesla’s future uncertain.
The company’s ambitious plans for autonomous “robotaxi” services and AI-driven growth have been overshadowed by regulatory uncertainty and fierce competition from both established automakers and emerging tech firms.
Despite a modest rebound after reports of White House efforts to broker peace between Musk and Trump, the damage appears lasting. Tesla’s 2025 performance stands in stark contrast to the broader market, with the company now facing questions about its strategic direction and ability to navigate a rapidly changing political and economic landscape.
As Tesla’s valuation continues to slide, the company’s position as a market leader—and Musk’s reputation as a visionary CEO—are under more scrutiny than ever before.
