Elon Musk vs Trump: Impact on Tesla, SpaceX, and Musk’s tech empire

When Elon Musk officially entered the Trump administration as head of Department of Government Efficiency (DOGE) in January 2025, it felt like a natural progression of their campaign trail relationship. Where Silicon Valley’s most mercurial (and also visionary) entrepreneur joined hands with Washington’s most unpredictable president. Fast-forward to not even six months later in June 2025, and that alliance lies in catastrophic ruins. 

Elon Musk’s public denunciation of Trump’s “One Big Beautiful Bill Act” (OBBBA) triggered a week of social-media attacks, threats to rescind subsidies and contracts, a 14% or $150 billion worth of Tesla share-price collapse in one day, and serious questions about SpaceX’s future NASA and US defence-related work. 

Also read: The Musk Effect: From Twitter to X and beyond

More than a personal falling-out, this Musk-Trump rupture highlights the risks when a private-sector titan wields public platforms against a sitting president – and the fallout now cascading across Musk’s sprawling ventures.

Elon Musk’s political journey: DOGE days to public war

Elon Musk’s official role at DOGE was billed as a game-changer for streamlining digital services, stripping out waste, and overhauling legacy systems across federal agencies. Musk’s promise to apply SpaceX and Tesla’s efficiency playbook to government platforms generated instant headlines – here was a private-sector maverick, unafraid to remap bureaucratic landscapes. But almost from DOGE’s launch, there was constant friction. On one hand US lawmakers questioned granting one corporate executive sweeping authority over federal contracts, while critics of the precedent warned Musk’s unrelenting focus on efficiency could squeeze small businesses out of vital government work.

By May 2025, Musk stepped back from DOGE’s day-to-day grind. Officially, his private ventures – Tesla and SpaceX – demanded more attention. Unofficially, Musk’s stance on electric-vehicle subsidies clashed with GOP zeal to slash federal spending. While he never publicly disparaged Trump from inside DOGE, his retreat hinted at deeper ideological cracks. As the world watched Musk’s status shift from quasi-cabinet member to a private-sector executive refocusing on rockets and battery-factories, the plaster of camaraderie with Trump began to fracture.

I’m sorry, but I just can’t stand it anymore.

This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.

Shame on those who voted for it: you know you did wrong. You know it.

— Elon Musk (@elonmusk) June 3, 2025

On June 3, Musk lit the fuse. In an incendiary X thread, he condemned OBBBA as a “disgusting abomination,” lambasting its trillion-dollar deficit and the repeal of Tesla’s $7,500 EV tax credit. The bill replaced direct credits with vague, performance-based incentives Tesla wouldn’t immediately qualify for. Musk’s central gripe was that US Republicans, including Trump, were reviving deficit spending patterns they once denounced, all while gunning for Tesla’s lifeline to mainstream consumers.

Trump’s retaliation was swift. On Truth Social, he accused Musk of being “crazy” and threatened to “terminate Elon’s government subsidies and contracts,” specifically warning that NASA and the Department of Defense might yank billions earmarked for Starship and Starlink development. The message couldn’t have been clearer to Elon Musk – attack Trump’s policies, and face punitive political retribution that could ripple through your ventures.

Musk-Trump war impacts Tesla negatively

Musk’s OBBBA critique posed an immediate existential threat to Tesla. In 2024 alone, federal EV tax credits accounted for roughly $2 billion in Tesla’s bottom line – support that helped seal the deal for countless buyers and underpinned planned production expansions at Gigafactories. 

Also read: Elon Musk in 2024: Top Tesla, SpaceX, AI and Neuralink highlights

When X lit up with Musk’s condemnation of OBBBA, Tesla stock plunged 14 percent on June 5, wiping out roughly $150 billion in market cap. In a single session, investors fretted over the prospect of losing those credits, combined with broader uncertainty over Trump’s threat to strip Tesla of future incentives.

The stakes ran deeper than subsidies. Tesla’s planned expansions in Republican-leaning states like Texas and Georgia relied on local and federal goodwill. Losing federal incentives could force price hikes, compress margins, and delay planned models like the long-promised Cybertruck. 

SpaceX and Starlink under siege

Beyond Tesla, Elon Musk’s SpaceX, long held as a darling of NASA and the US Department of Defense, suddenly faced a cloud of political uncertainty. In 2024, SpaceX raked in $3.8 billion in federal grants for Starlink’s rural broadband rollout and Starship lunar development – programs Trump personally championed. 

But Musk’s public barbs against OBBBA prompted immediate concern within SpaceX’s ranks. Congressional aides and Pentagon officials began scrambling to evaluate if Trump cancelled those NASA or DoD contracts, would Starship’s Artemis IV missions slip months – or years – behind schedule? Would rural broadband subsidies vanish, shuttering Starlink-dependent communities?

With doubts over SpaceX’s future projects, its competitors like OneWeb in the UK and Amazon’s Project Kuiper executives no doubt will sense this as an opportunity. If SpaceX lost its edge through political retribution, new bids for military payloads and government rural-connectivity grants would be imminent.

X’s future as the global town square

It has to be noted that all of Elon Musk’s fury erupted on X, the social-media platform he owns. By juxtaposing Trump’s past views on the platform with his current support for OBBBA, Elon Musk tried to undercut the president’s credibility. 

Also read: Elon Musk calls Bill Gates a liar, says won’t trust him to babysit my kids

This online flexing by Elon Musk didn’t go unnoticed. Congressional committees sprang back into investigating X’s content moderation and Section 230 protections. Could Musk’s personal vendetta against Donald Trump violate campaign finance rules? Would X, once hailed as a town square for Silicon Valley luminaries, now morph into a political battleground where a sitting president and his would-be ally volleyed barbs?

A defining moment for Musk’s empire

Elon Musk’s June 2025 split from Donald Trump marks more than a blip on the radar. For Elon Musk, the end of this bromance could directly imperil Tesla’s pricing power, SpaceX’s starship timetable, and his broader vision of a multiplanetary future.

Yet if there’s one constant in Musk’s playbook, it’s that he thrives on turning adversity into opportunity – and he is unbelievably stubborn when he believes he’s right. Should Trump’s threats materialize, Musk might leverage them to rally public sympathy – portraying Tesla owners and Starlink users as civilians caught in Washington’s crossfire. 

He might redouble efforts to diversify Tesla’s markets and privatize his energy ambitions through SolarCity or proprietary battery-storage ventures. SpaceX could forge new alliances with foreign space agencies hungry for Starship’s heavy-lift prowess.

Also read: Elon Musk to visit India later this year, Tesla and Starlink launch on the cards

Make no mistakes, Elon Musk’s skirmish with Trump is a trial by fire. If he emerges with Tesla’s revenue intact, SpaceX’s contract pipeline secure, and X still a viable platform for his brand, he will have reset the rules for how tech executives clash with political power. But if subsidies and contracts vanish, and regulators intensify business scrutiny, this feud will ultimately imply that the cost of publicly taking on a president may be too steep, even for someone who once dared to colonize Mars.

For now, Musk’s empire is shaken to the core. Tesla stock trembles, Starship missions hang in the balance, and X’s role as a fair platform comes under increased scrutiny. In a world where a single tweet can reshape billions in market value and millions of miles in rocket trajectories, Musk’s next move could well define not just his own legacy, but the future rules of engagement for tech titans in the political arena.

Also read: Elon Musk vs Sam Altman: AI breakup that refuses to end