Elon Musk vs Donald Trump feud: What's at stake here as Tesla boss takes on POTUS in this ‘big, beautiful' fight?
Elon Musk and Donald Trump are undoubtedly two of the most followed and heard people across the globe, but now they have turned their megaphones on each other, paving the way for one big controversy. Their disagreement on government policies is taking a new shape. It started with Musk's criticism of the massive tax and domestic policy bill, which Musk had termed a "disgusting abomination."
Regarding the voting on the bill, Elon Musk has received support from only three House Republicans, including Reps. Thomas Massie (R., Ky.) and Warren Davidson (R., Ohio), who previously voted against the bill. Meanwhile, Trump cannot afford to lose more than three votes, as doing so could jeopardise the future of his "big, beautiful bill".
For Elon Musk, the numerous government contracts that his company, SpaceX, has amassed over recent times, including the $15.2 billion in contracts from NASA, and the $5.8 billion from the Department of Defense, could be at stake. Donald Trump has already floated the idea of fiddling with Musk's business dealings with the federal government. This could significantly impact SpaceX's future, as government contracts form a fundamental part of the company.
Then comes the trickier aspects, which include the Securities and Exchange Commission investigation on Musk, which is related to the initial purchase of stakes in Twitter, which went on to later become X. An SEC investigation's furthering could mean a new headache for Musk, who already is knee-deep in government contracts, espcially with his other companies like Tesla and SpaceX.
Although SpaceX has relatively few government contracts, numerous federal policies directly affect its finances, including a $7,500 tax credit for electric vehicle buyers.
Meanwhile, in an interesting development, a letter from JPMorgan to clients, sent out Thursday, estimates the loss of the EV tax credit could cost Tesla $1.2 billion a year, and the loss of regulatory credit sales could hit them by another $2 billion.
Tesla is the worst-performing large-cap stock this year, thanks to declining electric vehicle demand, Chief Executive Elon Musk's political controversies over his ties to far-right groups, and now, his public feud with President Donald Trump, per a Reuters report.
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Time of India
42 minutes ago
- Time of India
Caught in Trump-Musk crossfire: Tesla stock sinks amid feud; $380bn wiped out — among 2025's biggest losses
The unlikely political marriage between Donald Trump and Elon Musk has ended in a fiery public divorce with Tesla's shares paying the price. The fallout began after Musk openly slammed Trump's new tax-and-spending bill on social media. In response, Trump fired back, threatening to cut off government contracts for both Tesla and SpaceX. The political clash added to Tesla's existing troubles, including slowing electric vehicle demand and Musk's controversial ties to far-right groups. As a result, Tesla is now the worst-performing large-cap stock of the year, with its market capitalisation plunging by 29.3% to $917 billion. The company, which ranked eighth globally in market value at the start of 2025, has now slipped to the tenth spot, as per Reuters report. Tesla's shares had initially surged 29% the week Trump won the 2024 election, fueled by investor optimism over a potentially favorable policy environment. However, since November 6, the stock has returned just 2.3%, compared to a 20% gain in the broader market over the same period—indicating growing investor unease. The White House has since stepped in, reportedly arranging a call with Musk to ease tensions. Despite a small rebound in Tesla shares on Friday, the broader damage appears done. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Descubra o valor de qualquer imóvel — basta digitar o endereço! Valor da casa | Anúncios de pesquisa Saiba Mais Undo Meanwhile, Apple has also faced a tough year, falling to the third most valuable company globally. Its $2.99 trillion market cap reflects a 20% drop this year due to slowing demand in China, AI challenges, and renewed trade tensions under the Trump administration. Tesla share price volatile after Trump-Musk feud Tesla shares plunged 14% on Thursday, wiping out over $150 billion in market value—their biggest single-day loss on record—amid a public feud between Elon Musk and U.S. President Donald Trump. The clash followed Musk's sharp criticism of Trump's tax-and-spending bill, which proposes ending the $7,500 EV subsidy by late 2025. The selloff hit broader markets, including Destiny Tech100 Inc., which holds a significant SpaceX stake, falling 13%. Short sellers gained nearly $4 billion from Thursday's crash, the second-largest single-day profit ever, according to Ortex. However, Tesla shares recovered some ground on Friday. At 9:40 am, the stock climbed 5.2% to $299.46, after Musk appeared open to de-escalating tensions, aligning with investor Bill Ackman's call for peace. Reports also suggest White House aides are arranging a call with Musk to cool the rift. The Thursday crash partly erased earlier gains from Tesla's announcement of a driverless "robotaxi" rollout in Austin, Texas. Still, the stock closed the week down 15%, its worst weekly performance since October 2023. Year-to-date, Tesla shares have dropped 22%, making it the worst performer among the "Magnificent Seven" tech stocks, despite remaining the world's most valuable automaker with a market cap of about $1 trillion. Yet its valuation—140 times projected earnings—continues to raise concerns amid growing political risks and regulatory uncertainty. What's gone wrong between Musk & Trump? Elon Musk stepped down from his role in the Trump administration last week after pressure from Tesla shareholders. While the split seemed friendly at first, things quickly turned sour. Since his exit, Musk has openly criticised Trump's key domestic policy—particularly the new tax bill, which he called a "disgusting abomination" on his social media platform, X. He argued that the bill undermines cost-cutting efforts led by the Department of Government Efficiency (DOGE), a team Musk was closely involved with. In response, Trump accused Musk of being upset over the bill's removal of electric vehicle (EV) tax incentives and claimed Musk turned against him because their once-friendly relationship no longer served his interests. Trump voiced his displeasure on Truth Social, stating: "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!" During an Oval Office address, with German Chancellor Friedrich Merz present, Trump expressed disappointment in their deteriorating relationship. Trump claimed he had asked Musk to leave, citing his decision to remove the EV mandate. "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!" Musk retaliated on X, claiming credit for Trump's 2024 electoral success and criticising his ingratitude. The exchange grew more hostile when Musk referenced Trump's connection to the Epstein files, concluding with "Have a nice day, DJT!" Elon Musk's other companies like SpaceX and Starlink—leaders in space launches and satellite internet—are now under scrutiny because of his political ties. These businesses often rely on favorable regulatory approvals, helped by Musk's government connections. Musk, who donated $300 million to Trump's campaign, claimed Trump's 2024 win would depend on his support. He later criticized Trump for being ungrateful, backed his impeachment, and warned that Trump's global tariffs could push the economy into a recession. Tesla shares have seen major ups and downs since Musk endorsed Trump last July. The stock jumped on hopes of reduced regulation for robotaxis but later dropped due to weak sales and backlash over Musk's political involvement. What analysts say about the Trump-Musk rift? Some analysts believe the Trump-Musk rift may not last long, as it could hurt both sides. "It's a junior high school fight where these best friends are now becoming frenemies," Dan Ives of Wedbush, a well-known Tesla supporter told Bloomberg. "It's a Twilight Zone situation for all investors, because the last thing investors want to see is Trump go from a huge supporter of Musk and Tesla to a foe," he added. Meanwhile, most Congressional Republicans are backing Trump in the fallout. That's a positive sign for the proposed bill, which could remove a key tax credit of up to $7,500 for buyers of some Tesla and other EV models by the end of this year—seven years earlier than planned. According to JPMorgan, if the bill passes, Tesla could lose about $1.2 billion in profit for the year. According to Paul Stanley of Granite Bay Wealth Management, the public disagreement between Trump and Musk increases Tesla's political and reputational risks. He notes that ongoing controversy could affect investor confidence and market stability. "Given that inherent powers of the office of the presidency, I don't see how this could be anything but negative for Tesla and Musk," he said. What's next for Tesla ? Tesla faces a significant milestone with its robotaxi service launch scheduled for June 12 in Austin, Texas. This development is crucial for Musk's strategy to transform the company's focus towards autonomous vehicles and AI technology. Wedbush's Ives describes the upcoming robotaxi launch as the "start of the autonomous vision and the next chapter of golden growth," whilst acknowledging Tesla as "way oversold." He advises investors to maintain patience. "I still believe that they stay friends and supporters of each other, but this is definitely a little white-knuckle period for Tesla investors," Ives added. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
NDTV
44 minutes ago
- NDTV
"We Will Take A Look": Donald Trump On Elon Musk's Government Contracts Amid Feud
Washington: US President Donald Trump said on Friday that he has no plans to speak with Elon Musk, signaling the president and his former ally might not resolve their feud over a sweeping tax-cut bill any time soon. Addressing reporters aboard Air Force One, Trump said he wasn't "thinking about" the Tesla CEO. "I hope he does well with Tesla," Trump said. However, Trump said a review of Musk's extensive contracts with the federal government was in order. "We'll take look at everything," the president said. "It's a lot of money." Trump may get rid of the red Tesla Model S that he bought in March after showcasing Musk's electric cars on the White House lawn, a White House official said, speaking on condition of anonymity. Musk, for his part, did not directly address Trump but kept up his criticism of the massive Republican tax and spending bill that contains much of Trump's domestic agenda. On his social-media platform X, Musk amplified remarks made by others that Trump's "big beautiful bill" would hurt Republicans politically and add to the nation's $36.2 trillion debt. He replied "exactly" to a post by another X user that said Musk had criticized Congress and Trump had responded by criticizing Musk personally. Musk also declared it was time for a new political party in the United States "to represent the 80% in the middle!" People who have spoken to Musk said his anger has begun to recede and they think he will want to repair his relationship with Trump, according to one person who has spoken to Musk's entourage. The White House statements came one day after the two men battled openly in an extraordinary display of hostilities that marked a stark end to a close alliance. Tesla stock rose on Friday, clawing back some losses from Thursday's session, when it dropped 14% and lost $150 billion in value, the largest single-day decline in the company's history. Musk's high-profile allies have largely stayed silent during the feud. But one, investor James Fishback, called on Musk to apologise. "President Trump has shown grace and patience at a time when Elon's behavior is disappointing and frankly downright disturbing," Fishback said in a statement. Musk, the world's richest man, bankrolled a large part of Trump's 2024 presidential campaign. Trump named Musk to head a controversial effort to downsize the federal workforce and slash spending. Trump feted Musk at the White House a week ago as he wrapped up his role as head of the Department of Government Efficiency. Musk cut only about half of 1% of total spending, far short of his brash plans to axe $2 trillion from the federal budget. Since then, Musk has denounced Trump's tax-cut and spending bill as a "disgusting abomination." His opposition is complicating efforts to pass the bill in Congress where Republicans hold a slim majority. Trump's bill narrowly passed the House of Representatives last month and is now before the Senate, where Republicans say they will make further changes. Nonpartisan analysts say the measure would add $2.4 trillion in debt over 10 years. House Speaker Mike Johnson said he has been texting with Musk and hopes the dispute is resolved quickly. "I don't argue with him about how to build rockets and I wish he wouldn't argue with me about how to craft legislation and pass it," Johnson said on CNBC. 'Very Disappointed' Trump had initially stayed quiet while Musk campaigned to torpedo the bill, but broke his silence on Thursday, telling reporters he was "very disappointed" in Musk. Musk, who spent nearly $300 million in last year's elections, said Trump would have lost without his support and suggested he should be impeached. Trump suggested he would terminate government contracts with Musk's businesses, which include rocket company SpaceX and its satellite unit Starlink. The billionaire then threatened to decommission SpaceX's Dragon spacecraft, the only US spacecraft capable of sending astronauts to the International Space Station. Musk later backed off that threat. Musk had been angered when Trump over the weekend revoked his nomination of Musk ally Jared Isaacman to head the US National Aeronautics and Space Administration. Two sources with direct knowledge of the dispute said White House personnel director Sergio Gor had helped turn Trump against Isaacman by highlighting his past donations to Democrats. Musk and Gor had been at odds since the billionaire criticized Gor's pace of hiring at a March cabinet meeting, the two sources said. A White House spokesperson, Steven Cheung, praised Gor's efforts to staff the administration but did not address his relationship with Musk. A prolonged feud could make it harder for Republicans to keep control of Congress in next year's midterm elections if Musk withholds financial support or other major Silicon Valley business leaders distance themselves from Trump. Musk had already said he planned to curtail his political spending, and on Tuesday he called for "all politicians who betrayed the American people" to be fired next year. His involvement with the Trump administration has provoked widespread protests at Tesla sites, driving down sales while investors fretted that Musk's attention was too divided.
NDTV
44 minutes ago
- NDTV
Musk- Trump Feud Poses Serious Threat To NASA, Pentagon Programs: Report
New York: Elon Musk's threat, which he later retracted, to cut off NASA's use of SpaceX's Dragon spacecraft would be a huge blow to NASA, depriving the space agency of the only American vehicle capable of transporting astronauts to the International Space Station and dramatically changing how NASA would access the $100 billion orbiting laboratory, The Washington Post has reported. The threat, posted on X, came during an escalating fight between the wealthiest man in the world and President Donald Trump, after Trump had threatened to cancel all of Musk's company's federal contracts. "Given SpaceX's importance to multiple federal programs, severing those relationships could leave NASA as well as the Pentagon and intelligence agencies in a lurch," noted the report. Several hours after making the threat, Musk relented, saying in response to a post on X that he should cool off and reconsider: "Ok, we won't decommission Dragon." Over the years, SpaceX has become a vital contractor, launching sensitive national security payloads such as satellites that provide missile warning, battlefield communication and guide munitions to precise targets, Xinhua news agency reported. In a statement, Bethany Stevens, NASA's press secretary, did not address how NASA would continue to fly its astronauts to the ISS without SpaceX, writing only that "NASA will continue to execute upon the President's vision for the fulfillment of space. We will continue to work with our industry partners to ensure the President's objectives in space are met." Earlier Elon Musk called for the impeachment of US President Donald Trump and announced the decommissioning of the vital SpaceX programme after accusing that Trump's name is in the Epstein files, according to media reports. 'In light of the President's statement about cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately,' Musk said in a post on X.
