Tesla Faces $380 Billion Market Value Drop Amid Political Feuds and Weak EV Demand

Tesla has recorded the largest market capitalization loss among top global companies in 2025, shedding around $380 billion so far this year. The electric vehicle giant’s stock has suffered due to declining EV demand, ongoing political controversies surrounding CEO Elon Musk, and a recent public feud with former U.S. President Donald Trump.

Tesla’s shares plunged sharply on Thursday after Trump threatened on social media to cut off government contracts with Musk’s companies, following Musk’s criticism of Trump’s tax and spending bill on his platform X. Despite this, Tesla shares rebounded slightly on Friday after White House aides arranged a call with Musk to de-escalate tensions.

At the start of 2025, Tesla was the eighth largest company worldwide by market value, but by early June it had fallen to tenth place.

Meanwhile, Apple, which began the year as the world’s most valuable company, dropped to third place after losing more than 20% of its market value, now at $2.99 trillion. Weak consumer demand in China, tariff threats linked to Trump’s policies, and slower advancements in AI contributed to the decline.

Microsoft has risen to become the world’s largest company by market capitalization, buoyed by strong demand for AI services and its partnership with OpenAI, alongside the integration of AI tools such as Microsoft 365 Copilot.