Musk and Trump Clash: Implications for Tesla, SpaceX, and Musk's Tech Dominion
When Elon Musk, the enigmatic tech entrepreneur, found himself as head of the Department of Government Efficiency (DOGE) in Trump's administration in January 2025, it was seen as a fitting match between a maverick Silicon Valley magnate and an unpredictable President. However, just half a year later in June 2025, the alliance crumbles in ruins following Musk's public rebuke of Trump's "One Big Beautiful Bill Act" (OBBBA).
Musk's scathing criticism set off a series of events: a week of social media attacks, threats to withdraw subsidies and contracts, a staggering $150 billion drop in Tesla's stock price in a single day, and speculation about SpaceX's future collaborations with NASA and US defense agencies.
This bitter rift between Musk and Trump extends beyond personal differences, raising concerns about the repercussions on Musk's sprawling ventures.
Musk's Politically Charged Journey: From DOGE Days to Public Feud
As head of DOGE, Musk promised revolutions in streamlining digital services and overhauling legacy systems across federal agencies. His vision of applying SpaceX and Tesla's efficiency methodology to government platforms was literal 'rocket fuel' for media headlines. Yet, from its inception, DOGE was a hotbed of friction. American lawmakers questioned Musk's vast authority over government contracts, while critics worried about smaller businesses being squeezed out of vital government work.
By May 2025, Musk eased away from DOGE's daily operations, citing the demands of Tesla and SpaceX. Though he never publicly criticized Trump while at DOGE, his growing distance from the administration hinted at deeper ideological discord.
On June 3, Musk pressed the self-destruct button. In a fiery Twitter thread, he denounced OBBBA as a "disgusting abomination," slamming its trillion-dollar deficit and the repeal of Tesla's $7,500 electric vehicle tax credit. The replacement of direct credits with performance-based incentives Tesla would not immediately qualify for was the cherry on top. Musk's central grievance was that Republicans, including Trump, were once conservative on deficit spending but were now undoing that progress, all while guns were trained on Tesla's lifeline to the mainstream consumer market.
Trump's response was swift. On Truth Social, he labelled Musk "crazy" and threatened to "terminate Elon's government subsidies and contracts," specifically singling out NASA and Department of Defense billions earmarked for Starship and Starlink development.
Tesla Takes the Brunt of the Blow
Musk's criticism of OBBBA was an immediate existential threat to Tesla. In 2024 alone, federal EV tax credits accounted for approximately $2 billion in Tesla's profits, supporting countless sales and planned production expansions at Gigafactories. When Musk's denouncement lit up Twitter, Tesla's stock plummeted a mind-boggling 14 percent, obliterating around $150 billion in market cap in a single session.
SpaceX Faces a Shadow of Uncertainty
Beyond Tesla, SpaceX, long revered by NASA and the Department of Defense, suddenly found itself amidst a cloud of political doubt. In 2024, SpaceX pocketed $3.8 billion in federal grants for Starlink rural broadband deployment and Starship lunar development - programs Trump himself championed. However, Musk's public barbs against OBBBA prompted worries within SpaceX's ranks. Congressional aides and Pentagon officials rushed to scrutinize whether Trump would indeed cancel those NASA or DoD contracts. This looming specter could potentially delay Starship’s Artemis IV missions or Starlink-dependent rural broadband subsidies.
Competitors such as OneWeb in the UK and Amazon's Project Kuiper watched, senses tingling, ready to cash in should SpaceX lose its edge due to political retribution.
The Future of X as Global Town Square
Remarkably, all of this commotion unfolded on X, the social media platform Musk himself owns. Critics attacked Musk for using X to undermine Trump's credibility. This contention drove Congressional committees to probe X's content moderation and Section 230 protections. Could Musk's vendetta against Trump be a violation of campaign finance rules? Would X, once acclaimed as a haven for Silicon Valley elites, transform into a political battleground where elected officials and would-be allies traded barbs?
A Test for Musk's Multi-Billion Dollar Empire
In simpler terms, Elon Musk's June 2025 split with Donald Trump is much more than a blip on Tesla or SpaceX's radars. For Tesla, this rupture could jeopardize its pricing power, and for SpaceX, it could cast shadows over Starship timelines. The fallout of this feud could redefine the rules of engagement for tech titans when dealing with political power.
[1] "The Story Behind Elon Musk's Brief Stint as Trump's Most Unlikely Cabinet Member." Wired. March 2025.
[2] "Elon Musk's DOGE Departure Signals Shifting Priorities and Political Divides." The Verge. June 2025.
- The public feud between Elon Musk and President Trump escalates to a critical point in the business and finance world, resulting in a staggering $150 billion drop in Tesla's stock price in a single day.
- The political fallout from Musk's criticism of Trump's policies extends beyond Tesla to SpaceX, causing uncertainty over future collaborations with NASA and US defense agencies, potentially affecting Starship's Artemis IV missions and Starlink-dependent rural broadband subsidies.
