Investors bought hundreds of billions of dollars of Tesla stock after Donald Trump was elected on a bet that politics were more important than profits.
In three hours Thursday, they learned yet again how dangerous that gamble could be.
Shares of Elon Musk’s electric vehicle maker plunged more than 14% in a stunning wipeout as investors dumped holdings amid a bitter war of words between the president and the world's richest man. By the end of the trading day, $150 billion of Tesla's value had been erased, more than what it would take to buy all the shares of Starbucks and hundreds of other big publicly traded U.S. companies.
In after-hours trading, Tesla shares rose 0.8%.
The disagreement started over the president's budget bill, then quickly turned nasty. After Musk said that Trump wouldn't haven't gotten elected without his help, Trump implied that he may turn the federal government against his companies, including Tesla and SpaceX.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on his social messaging service Truth Social. “I was always surprised that Biden didn’t do it!”
The drop on Thursday partially reversed a big runup in the eight weeks since Musk confirmed that Tesla would be testing an autonomous, driverless “robotaxi” service in Austin, Texas, this month.
Investors fear Trump might not be in such a rush to usher in a future of self-driving cars in the U.S., and that could slam Tesla. So much of its real business selling electric cars is struggling now and so it needs the promise of a new age of driverless cars to be realized— and fast.
“The whole goal of robotaxis is to have them in 20 or 25 cities next year," said Wedbush Securities analyst Dan Ives, one of Tesla's biggest fans, but now worried. "If you start to heighten the regulatory environment, that could delay that path.”
He added, "There is a fear that Trump is not going to play Mr. Nice Guy.”
Trump's threat to cut government contracts seems targeted more to another of Musk's businesses, SpaceX, than his car company. The privately held rocket company has received billions of dollars for sending astronauts and cargo to the International Space Station, providing launches and doing other work for NASA. The company is currently racing to develop a mega rocket for the space agency to send astronauts to moon next year.
A subsidiary of SpaceX, the satellite internet company Starlink, appears to also have benefited from Musk's once-close relationship with the president.
On a trip with Trump to the Middle East last month, Musk announced that Saudi Arabia had approved Starlink for aviation and maritime use. Though its not clear how much politics has played a role, a string of other recent deals in Bangladesh, Pakistan, India and elsewhere has come as Trump has threatened tariffs and sent diplomats scrambling to please the president.
One measure of SpaceX's success: A private financing round followed by a private sale of shares in recent months reportedly valued it at an $350 billion, up from an estimated $210 billion a year ago.
Now all that is possibly in danger. Tesla shares got even a bigger lift from Musk's close relationship with Trump, initially at least.
After the presidential election in November, investors rushed into the stock, adding more than $450 billion to its value in a few weeks. The belief was that the company would see big riches as Trump eased regulatory oversight of Tesla. They also were betting that the new administration would embrace Musk's plans for millions of cars on U.S. roads without drivers behind the wheel.
After hitting an all-time high on Dec. 17, the shares retreated as Musk’s time as head of a government cost-cutting group led to boycotts and a hit to Tesla's reputation. They've recently popped higher again after Musk vowed to focus more on Tesla and its upcoming driverless taxi launch.
Now investors aren't so sure, a worry that has translated into big paper losses in Tesla stock held by Musk personally — down $20 billion for the day.
FILE - President Donald Trump and Tesla CEO Elon Musk speak to reporters as they sit in a red Model S Tesla vehicle on the South Lawn of the White House, March 11, 2025, in Washington. (Pool via AP, File)
President Donald Trump speaks during a news conference with Elon Musk in the Oval Office of the White House, Friday, May 30, 2025, in Washington. (AP Photo/Evan Vucci)
MANCHESTER, England (AP) — Managerless Manchester United crashed out of the FA Cup with a 2-1 defeat to Brighton on Sunday.
At the end of a week that saw the storied Premier League team fire head coach Ruben Amorim, the loss at Old Trafford has likely consigned United to another trophyless season and was greeted with loud jeers from the home crowd.
Former United striker Danny Welbeck scored what proved the decisive goal in the 64th minute, and Benjamin Sesko's late header was only a consolation for the hosts in the third-round match.
United has exited both domestic knockout competitions at the earliest possible stage this season, following the humbling loss to fourth-tier Grimsby in the English League Cup. The latest defeat means United will play the bare minimum of 40 competitive games for a top division team this season.
Its only chance of silverware this term is the Premier League, which would require a remarkable turnaround with the 20-time champion currently seventh in the standings and 17 points behind leader Arsenal with 17 games left.
United hopes an interim coach will be able to secure Champions League qualification, with the club having spoken to former players Ole Gunnar Solskjaer and Michael Carrick about taking on the role until the end of the season. Youth coach Darren Fletcher, who has taken charge of the two games since Amorim's departure, is also a contender, as well as former United striker Ruud van Nistelrooy.
The loss to Brighton underlined the job facing the interim coach.
Brajan Gruda fired the visitors ahead in the 12th, with Welbeck doubling the advantage after the break. Sesko scored his third goal in two games in the 85th, but substitute Shea Lacey was sent off four minutes later and United could not force an equalizer to take the game to extra time.
Arsenal advanced earlier Sunday with Gabriel Martinelli scoring a hat trick in a 4-1 win at Portsmouth.
Martinelli's treble helped the Premier League leader come back from going a goal down to the second-tier Championship team inside three minutes.
Colby Bishop stunned Arsenal with the opening goal at Fratton Park, but the lead only lasted five minutes after Andre Dozzell scored an own-goal.
Martinelli put the visitors ahead with a flicked header in the 25th. He slid in for his second six minutes after the break and headed in his hat-trick goal in the 72nd. It was the first time the Brazilian had scored a hat trick for Arsenal.
Victory could have been even more emphatic if Noni Madueke had converted from the penalty spot in the first half.
“It’s always tough to go into these places, especially in the manner that we started the game, conceding the early goal, but we managed to turn things around so I’m very happy,” said manager Mikel Arteta.
Record 14-time FA Cup winner Arsenal last lifted the trophy in Arteta’s first season in charge in 2020. It was the last major honor the London club won, but victory against Portsmouth maintains its four-pronged trophy pursuit along with the Premier League title, the Champions League and the English League Cup.
“I think we are very privileged to be where we are, and the games that we have to play, which means that we are in every competition,” Arteta said.
Top-flight Leeds was also behind to Championship opposition, but recovered from 1-0 down to beat Derby 3-1 at Pride Park.
Third-tier Mansfield pulled off an upset to beat Championship side Sheffield United 4-3 and Norwich routed Walsall 5-1, with Jovon Makama scoring a hat trick. Norwich head coach Philippe Clement later said that U.S. international Josh Sargent refused to play in the game.
Relegation-fighting West Ham needed extra time to beat QPR 2-1. Valentin ‘Taty’ Castellanos’ goal saw Nuno Espirito Santo’s team end a 10-match winless run.
West Bromwich Albion beat Swansea 6-5 on penalties following a 2-2 draw after extra time. Hull won 4-3 against Blackburn on penalties after a 0-0 draw.
James Robson is at https://x.com/jamesalanrobson
AP soccer: https://apnews.com/hub/soccer
Brighton's Danny Welbeck celebrates after scoring during the FA Cup third round soccer match between Manchester United and Brighton in Manchester, England, Sunday, Jan. 11, 2026. (AP Photo/Jon Super)
Manchester United's Matheus Cunha reacts during the FA Cup third round soccer match between Manchester United and Brighton in Manchester, England, Sunday, Jan. 11, 2026. (AP Photo/Jon Super)
Arsenal's Gabriel Martinelli scores during the FA Cup third round soccer match between Portsmouth and Arsenal in Portsmouth, England, Sunday, Jan. 11, 2026. (AP Photo/Kin Cheung)
Arsenal's Gabriel Martinelli and Noni Madueke celebrate after a goal during the FA Cup third round soccer match between Portsmouth and Arsenal in Portsmouth, England, Sunday, Jan. 11, 2026. (AP Photo/Kin Cheung)
Leeds United's James Justin scores their side's third goal of the game during the Emirates FA Cup third round match between Derby County and Leeds United, in Derby, England, Sunday Jan. 11, 2026. (David Davies/PA via AP)
Leeds United's Ao Tanaka, right, celebrates with Wilfried Gnonto after scoring their side's second goal of the game during the Emirates FA Cup third round match between Derby County and Leeds United, in Derby, England, Sunday Jan. 11, 2026. (David Davies/PA via AP)
Arsenal players celebrate after a goal during the FA Cup third round soccer match between Portsmouth and Arsenal in Portsmouth, England, Sunday, Jan. 11, 2026. (AP Photo/Kin Cheung)
