Tesla’s Market Cap Drops $380B & Humanoid Robot Head Quits Amid Robotaxi Records Trouble

Recently, Tesla announced that it had finally launched in the Kingdom of Saudi Arabia—a move that came as the global demand for electric vehicles (EVs) has been growing.

Unfortunately, this news remains a rare win for the EV company this year, as Tesla has been embroiled in a series of challenging situations. These include slowing sales, revenue slips, and market capitalization dips. In fact, even the Saudi Arabia launch consists of controversies and challenges.

Although, the latest bout of difficulties has been courtesy of the CEO’s political connection—or rather the severing of connections.

For months after President Donald Trump took office, Elon Musk was heading the DOGE (Department of Government Efficiency) effort. At the end of May, Musk finally left his role in that initiative but was rumored to remain in touch with the White House for other strategies.

The early days of June came with a spat between President Trump and Elon Musk, which included some tea-spilling, name-calling, and party-changing. For all intents and purposes, it looked like Musk’s tenure with the Trump administration was done and dusted—a declaration that came from both sides.

Either way, picking a fight with the President of the United States wouldn’t be good for Musk’s business—and that’s exactly what transpired.

In one day, Tesla managed to have $152 billion wiped from its market value.

This added to the company’s already faltering market capitalization, which saw a total drop of $380 billion in 2025, making it the worst-performing large-cap stock of the year.

Essentially, the company’s market cap fell 29.3% in 2025, taking its value to $917 billion, which even saw it slip from rank #8 in the largest companies by market capitalization globally to rank #11, as per CompaniesMarketCap. Tesla’s stocks rallied to pull back around 4% by closing on Friday.

In addition to the spat, reasons for the dip include dwindling demand for EVs, tough competition from cheaper Chinese brands, and President Trump revealing potential plans to cut off government contracts with Elon Musk's companies.

“It might be a bit too hopeful to think their relationship will ever go back to what it once was, but if cooler heads prevail and the tension eases, that would definitely be a big improvement for Tesla,” said Matthew Britzman, Hargreaves Lansdown analyst and Tesla shareholder.


To add to Tesla’s misery, the head of engineering for the Optimus humanoid robot program—Milan Kovac—announced plans to leave the company after more than nine years. However, the move comes out of personal motivation rather than professional reasons.

“This week, I’ve had to make the most difficult decision of my life and will be moving out of my position,” reads an excerpt from the announcement. “I’ve been far away from home for too long, and will need to spend more time with family abroad. I want to make it clear that this is the only reason, and has absolutely nothing to do with anything else. My support for @elonmusk [Elon Musk] and the team is ironclad - Tesla team forever.”

Reportedly, the role will be filled by Ashok Elluswamy, who currently leads Tesla's autopilot teams.

Neither Tesla nor Elluswamy commented on the matter.

All of this comes as Tesla tries to stop officials in Austin from releasing public records to Reuters that contain details about the company’s plan to launch self-driving robotaxis in the city.

In February, Reuters requested to access communications between Tesla and Austin officials over the previous two years, following a January announcement by Elon Musk regarding the launch of fare-collecting robotaxis in Austin.

On April 1, Austin public-information officer Dan Davis said that “third parties” had asked the city to withhold the records to protect their “privacy or property interests.”

On April 16, a Tesla attorney wrote to Texas’ Attorney General objecting to the release of emails between the two parties, citing “confidential, proprietary, competitively sensitive commercial, and/or trade secret information” that would reveal “Tesla’s deployment procedure, process, status and strategy” and “irreparably harm Tesla.”

Following this, Tesla and the Texas Attorney General's office did not respond to comments on the matter.

Tesla has been trying to enter the robotaxi market for a long while, but has been facing delays in its launch plans, as well as stiff competition from rivals such as Uber, WeRide, and others. At the same time, the company's consumer automobile business faces threats from BYD, Volkswagen, and others.

Do you think Tesla will be able to claim the top spot in the EV sector again? Do you think its competitors, especially Chinese automakers such as BYD, will eat away more of its market share?

Let us know in the comments below!