Why Elon Musk’s feud with US President Trump could hurt SpaceX, Tesla, and X
Government contracts, EV sales, robotaxi plans at risk as Musk clashes with White House
Dubai: Elon Musk — the billionaire behind Tesla, SpaceX, and social media platform X — is locked in an escalating war of words with U.S. President Donald Trump, and this is a feud with potential billion-dollar consequences.
What began as criticism of Trump’s latest spending bill has turned into a very public and personal feud, with potential fallout for Musk’s core businesses that depend heavily on government support.
This week alone, Tesla stock tumbled 5.3%, rattling investors and index funds worldwide. And with SpaceX’s multibillion-dollar NASA contracts and Tesla’s ongoing challenges in EV sales and self-driving tech, this political clash comes at a high-stakes moment.
What started it all?
The row began after Musk slammed President Trump’s signature tax-and-spending bill, calling it bad for jobs and innovation. Musk took to X (formerly Twitter) to warn politicians supporting the bill that he would campaign against them — even calling the Republican party “the PORKY PIG PARTY!!” and threatening to launch a new political party.
President Trump fired back, accusing Musk of being ungrateful for the government subsidies that helped build Tesla and SpaceX. In a post on Truth Social, Trump wrote:
“Elon may get more subsidy than any human being in history… Without subsidies, Elon would probably have to close up shop and head back home to South Africa.”
Trump even told reporters he might consider deporting Musk, pausing when asked and saying, “We’ll have to take a look.”
Musk, who became a U.S. citizen in 2002, responded with restraint: “So tempting to escalate this. So, so tempting. But I will refrain for now.”
What’s at stake for Musk?
This fight isn’t just political drama — it could hurt Musk’s companies directly:
SpaceX holds key NASA contracts and Pentagon deals worth billions, including a mission to land astronauts on the moon. Trump has hinted at pulling support.
Tesla, meanwhile, is testing a high-profile robotaxi service in Austin, Texas — a project now facing scrutiny from federal safety regulators after some cabs were filmed behaving erratically.
If federal agencies take a tougher line, or if Trump redirects government contracts, Musk’s plans could hit serious roadblocks.
Tesla’s deeper problems
Even without politics, Tesla’s numbers are under pressure:
European sales dropped 28% in May, marking the fifth straight month of year-on-year declines.
Musk previously blamed delayed purchases on anticipation for the new Model Y, but analysts say boycotts over Musk’s political views may be affecting demand.
Tesla is also under investigation by the National Highway Traffic Safety Administration (NHTSA), which is reviewing its Full Self-Driving software after several incidents.
Why this matters globally
Musk’s feud with President Trump could have wider market implications:
Tesla is one of the “Magnificent Seven” tech stocks, alongside Apple and Alphabet, that make up a large chunk of the S&P 500. Any sharp move in its stock affects millions of retirement and investment portfolios globally.
If SpaceX loses access to U.S. funding, its planned space missions and satellite deployments could slow dramatically.
And if Musk continues prioritising political spats over product launches, investors may grow wary.
Bottom line: Musk is risking it all in a political crossfire
Musk once walked a fine line with both political parties — benefiting from green energy incentives under Democrats and tech funding and defense contracts under Republicans. But now, with President Trump back in office and on the attack, that balance may have tipped.
“He’s managed to alienate both sides,” said Dan Ives of Wedbush Securities. “That’s hard to do — but Musk has pulled it off.”
- With inputs from Agencies
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