- The relationship between President Trump and Elon Musk imploded this week.
- Trump and Musk have traded escalating barbs and threats via social media.
- Musk-owned companies SpaceX and Tesla could see negative fallout from the breakup.
Will the spectacular implosion of President Donald Trump’s relationship with billionaire tech mogul Elon Musk be the kiss of death for SpaceX and Tesla?
Last week saw Trump host a fawning Oval Office send-off for Musk who was departing his role as de facto head of the president’s newly formed Department of Government Efficiency. But it didn’t take long for the gilding on the departure ceremony to wear thin as Trump and Musk traded an escalating series of barbs, insults and insinuations this week.
The tete-a-tete, carried out mostly on social media, was kicked off with Musk characterizing Trump’s mammoth tax and spending bill, currently making its way through Congress, as an “abomination” and eventually led to Trump declaring that Musk was “crazy.”
“Elon was ‘wearing thin’,” Trump wrote in a Thursday posting to Truth Social. “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!”
Along the way, Trump suggested, in another Truth Social posting, that the “easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.” Those contracts include tens of billions of dollars for SpaceX services and spacecraft development related to the International Space Station and various NASA efforts including the Artemis program aiming to put U.S. astronauts back on the moon in 2027.
Musk’s response was immediate and to the point.
“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk wrote.
But just hours later, Musk walked back the decommissioning threat in a response to a post from one of his X followers encouraging both he and Trump to cool things down.
“Ok, we won’t decommission Dragon,” Musk wrote.
Failure to launch
A cancellation of its U.S. federal government contracts, should it come to fruition, would have massive financial consequences for SpaceX, the space vehicle development company Musk launched in 2002.
SpaceX president and COO Gwynne Shotwell has said the company currently has about $22 billion in federal government contracts with a variety of agencies.
Easily the biggest majority of that value, around $15 billion, is with NASA, where SpaceX provides transport services, via its Dragon spacecraft, for both cargo and astronauts to and from the International Space Station. The company also provides launch services for classified satellites and other payloads to the Defense Department, according to Reuters, and is also the contractor for a variety of services related to the upcoming decommissioning of the ISS in 2030.
While a loss of federal dollars would be devastating to SpaceX, a cancellation of current contracts would have seismic impacts on U.S. space-related efforts. One of the most significant of those impacts would include the loss of the Dragon spacecraft, currently the only U.S.-based vehicle certified to carry supplies and astronauts back and forth to the ISS.
Tesla unplugged?
While Tesla benefits from various state and federal subsidy programs, including a $7,500 federal electric vehicle credit that is slated to be phased out in Trump’s current budget proposal, the harms that have befallen the Musk-owned automaker of late are more personal in nature and were well in play before this week’s relationship melt-down.
The end of federal programs aimed at growing the EV sector would not damage Tesla as severely as other problems the automaker is confronting, John Helveston, a professor at George Washington University who studies the electric vehicle industry, told NPR.
“Musk hasn’t done Tesla any favors by taking extremely unpopular actions in his time at DOGE, and globally the business is struggling from other decisions, like focusing on the Cybertruck instead of releasing more new practical models that consumers actually want,” Helveston said. “In the European Union, sales are down heavily from the political damage, and sales in China are down from intense competition of very competitive Chinese EVs.”
Tesla sales volumes, and stock prices, have been trending downward since the start of the year and the company saw a 14% drop in share price on Thursday. As of midday Friday, Tesla stock was up a little over 5%.
Tesla’s stock value had an incredible ride in 2024, gaining over 80% over the course of the year, with most of that price ascension realized after Trump won reelection on Nov. 6.
Industry watchers say that post-election bump was driven in large part by investor confidence that Musk’s massive financial support of Trump, with campaign contributions reportedly north of $270 million, and subsequent appointment to lead DOGE, would bode well for Tesla’s future performance as the CEO joined the president’s inner circle.