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The public breakdown between US President Donald Trump and Tesla CEO Elon Musk grew exponentially bitter on Thursday, transforming what was once a powerful political alliance into a vicious war of words that has wiped billions from Tesla's market value and threatens to derail the president's flagship budget legislation.

The feud reached its peak when Musk made explosive allegations about Trump's connection to disgraced financier Jeffrey Epstein, marking a dramatic escalation in their increasingly personal conflict. The fued between the two men got nastier, less than a week after Musk officially left his position spearheading the quasi-official Department of Government Efficiency.

The latest round of hostilities erupted during an Oval Office meeting with German Chancellor Friedrich Merz, when Trump was asked about Musk's criticism of his signature budget legislation.

"Elon and I had a great relationship. I don't know if we will any more," Trump told reporters, his disappointment evident. The president expressed his frustration more directly, saying: "I'm very disappointed in Elon. He knew every aspect of this bill. He knew it better than almost anybody, and he never had a problem until right after he left." Trump continued his criticism, adding: "He said the most beautiful things about me, and he hasn't said bad about me personally, but I'm sure that'll be next, but I'm very disappointed in Elon. I've helped Elon a lot."

Musk's response on X was swift and defiant, flatly contradicting the president's account. "False, this bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!" he wrote, before escalating the personal attack by claiming that without him Trump would have "lost the election" and bemoaning what he called "such ingratitude".

But Thursday brought a far more acrimonious and personal tone to the exchanges when Musk launched his most damaging attack yet. In a jaw-dropping social media post, Musk alleged that Trump's name "is in the Epstein files. That is the real reason they have not been made public."

The tech billionaire amplified his attack by reminding his 220 million followers of Trump's quote about Epstein from a New York magazine profile more than two decades ago: "He's a lot of fun to be with. It is even said that he likes beautiful women as much as I do, and many of them are on the younger side." Musk concluded his post with a gleeful taunt: "Have a nice day, DJT!" and suggested marking the post "for the future. The truth will come out."

The exchange rapidly devolved into a series of increasingly serious threats. Trump responded by threatening to terminate Musk's lucrative government subsidies and contracts, prompting the SpaceX boss to counter with his own nuclear option: potentially decommissioning the Dragon spacecraft that had recently rescued astronauts stranded on the International Space Station for months. The threat could throw US space programmes into chaos, highlighting how deeply intertwined Musk's business empire has become with critical government operations.

As the feud intensified, Musk crossed into unprecedented territory by suggesting Trump should be impeached and that JD Vance should replace him as president. Right-wing influencer Ian Miles Cheong, who has 1.2 million followers on X, posted that "my money's on Elon" in the battle between Musk and Trump, asserting that "Trump should be impeached and JD Vance should replace him." Less than 30 minutes later, Musk reposted Cheong's message, adding simply: "Yes."

Musk also warned that Trump's global tariffs would "cause a recession in the second half of this year" and launched an online poll asking whether a new political party should be formed, moves that are certain to enrage the president.

Tesla shares plummeted more than 14 per cent on Thursday alone, erasing approximately USD 152 billion from the company's value and reducing it to roughly USD 900 billion. The decline knocked USD 8.73 billion off Musk's personal net worth according to the Bloomberg Billionaires Index, demonstrating how quickly political feuds can translate into economic consequences.

Trump also took to his social media platform Truth Social to fire fresh salvo against Musk. In a post on Truth Social, he stated, "I don't mind Elon turning against me, but he should have done so months ago. This is one of the Greatest Bills ever presented to Congress. It's a Record Cut in Expenses, USD 1.6 Trillion Dollars, and the Biggest Tax Cut ever given. If this Bill doesn't pass, there will be a 68 per cent Tax Increase, and things far worse than that. I didn't create this mess, I'm just here to FIX IT. This puts our Country on a Path of Greatness. MAKE AMERICA GREAT AGAIN."

Trump stated that he told Musk to leave and took away his Electric Vehicle (EV) Mandate that forced everyone to purchase electric cars.

"Elon was "wearing thin," I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY," he posted on Truth Social.

In response to Trump post, Elon Musk on X wrote, "Such an obvious lie. So sad." He made this statement in response to a post shared by a user named Autism Capital on X. The user had shares screenshot of Trump's post and mentioned, "Trump fires back at Elon. The online battle begins."

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Trump even threatened to terminate Elon Musk's governmental subsidies and contracts. "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," Trump posted on Truth Social.