The spat between U.S. President Donald Trump and Elon Musk, the world’s richest person, entered new territory on Thursday — with Tesla getting caught up in the fallout. What began with Musk publicly slamming Trump’s spending bill has evolved into a full-blown row between the two, with the president threatening to withdraw billions of dollars’ worth of government contracts for Musk’s companies. Musk, meanwhile, claimed Trump would never have won a second term in office without his input in the campaign, and said SpaceX would immediately decommission its Dragon spacecraft due to Trump’s threats to cut funding. As the pair — who once enjoyed a friendly relationship that landed Musk a job in Trump’s administration — publicly traded jibes, Tesla saw $152 billion wiped from its market cap on Thursday. That’s the biggest hit to its valuation ever. Shares of the company have shed nearly 30% of their value so far this year, but were last 5% higher in pre-market trade on Friday. Overlook the ‘schoolyard spat’? Market watchers said the falling out between Musk and Trump was adding renewed pressure to Tesla , which has already been battling poor car sales and questions over Musk’s ability to lead the company given his other ventures, including SpaceX and xAI . Tom Hulick, CEO of Strategy Asset Managers, told CNBC’s “Squawk Box Europe” on Friday that there would naturally be concern mounting in markets with “two people going at each other’s throats just like Trump and Musk are right now.” However, he urged investors to overlook what he labeled the “schoolyard spat” and focus on energy infrastructure developments in the U.S. and beyond, as well as data from the company on earnings, savings and investments. “We’re really seeing more positive signs than negative, and whether there’s a spat between Trump and Musk or between two different nations, I think people are going to settle down and cooler heads are going to prevail,” Hulick, a Tesla bull, told CNBC. Strategy Asset Managers owns Tesla stock. Hulick added on Friday that although the EV giant was under a lot of pressure given the media attention on Musk. “You can’t deny [Tesla is] an industry leader in a lot of things.” “I think [this is] temporary,” he added. “What happens to Tesla beyond this point … is really dependent on what the earnings outlook is for the company. I think down the road there’s so much positive in there for the EV industry and for Tesla. We’re not going to focus on that near-term stress.” Rico Luman, a senior economist specializing in the transport, logistics and automotive sectors at ING Research, told CNBC on Friday that Musk’s political career “hasn’t done anything good for Tesla” — and the escalation of his row with Trump had only exacerbated the impact. “Tesla’s market value is built largely on future growth expectations (unit sales growth but also software autonomous driving and adjacent fields like robotisation),” he explained in an email, noting that the stock price had already come under pressure due to disappointing production and delivery figures. Tesla missed estimates on its top and bottom lines when it reported its first-quarter earnings in April, with auto revenue dropping 20% from a year earlier. However, Luman argued, “slowing global demand for EVs is just part of this story.” “The company is suffering headwinds in all three large regional blocks across the globe, including the U.S.,” he told CNBC. “In order to deliver on its growth ambition, it requires regulatory accommodation in its home and most important market the US. Soured relations with the government may impact this negatively. Markets seem to price in higher regulatory risk.” Tesla shareholders stuck in a ‘battle zone’ In a note on Thursday, Wedbush’s Dan Ives, a longtime fan of Tesla, also likened the deterioration of Musk’s relationship with Trump to a “high school friends feud.” “This situation … must start to be calmed down on the Musk and Trump fronts and it’s not good for either side,” he said. “This feud does not change our bullish view of Tesla and the autonomous view but clearly does put a fly in the ointment of the Trump regulatory framework going forward. It’s another Twilight Zone moment.” Russ Mould, investment director at AJ Bell, noted the boost Tesla’s shares got last year as Musk and Trump’s relationship blossomed. “Investors thought Musk — and therefore Tesla by default —would get special treatment,” he said in a note on Friday morning. However, Trump now seems to be on a mission to make Musk’s life difficult, Mould added. “Tesla shareholders are stuck in the middle of the battle zone, as whatever happens to Musk will act as a proxy for the car company’s share price.” Labeling Musk’s outspokenness a “liability” for Tesla shareholders, Mould suggested his position at the head of the firm could ultimately come into question. “[Musk] recently pledged to stay on as CEO for at least another five years, but if he cannot be restrained from stoking fires on the public stage, Tesla’s board might have to think long and hard about his future with the business,” he said. CNBC has contacted Musk and Tesla for comment.