Trump–Musk Feud Threatens Tesla and SpaceX Growth \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ A growing feud between President Donald Trump and Elon Musk threatens to upend Tesla’s self-driving ambitions, SpaceX’s government contracts, and Starlink’s global expansion. The dispute has rattled investors, sparked regulatory scrutiny, and cast doubt over Musk’s political and business future. The fallout could reshape multiple industries and shake up Washington-Silicon Valley ties.
Quick Looks
- Trump–Musk feud could block Tesla robotaxi rollout
- SpaceX’s NASA contracts and Starlink deals at risk
- Tesla stock drops amid political fallout and regulatory fears
- Carbon credits and EV sales face fresh political threats
- X platform may lose advertisers if Trump turns hostile
Deep Look
The world’s richest man is suddenly in a high-stakes standoff with the world’s most powerful politician—and the cost could be measured in billions. Elon Musk, CEO of Tesla, SpaceX, Starlink, and X, is now embroiled in a feud with President Donald Trump that threatens the future of his companies and their deep connections to government contracts, regulatory agencies, and global partners.
The dispute, which began with sharp public criticism and veiled threats, now looms large over Tesla’s much-anticipated rollout of autonomous robotaxis in Austin, Texas, scheduled for next week. For Musk, the event is critical. Electric vehicle sales have slowed, competition is rising, and Tesla needs a breakthrough. The robotaxi launch was meant to be just that—a moment of innovation to silence critics and re-energize investors.
But Trump could easily derail the event. Even before tensions flared, the National Highway Traffic Safety Administration (NHTSA) requested detailed data on how Tesla’s driverless taxis perform in poor visibility. The move follows an ongoing probe into more than 2 million Teslas with full self-driving features, including a fatal crash that killed a pedestrian. The Department of Justice is also reportedly investigating Tesla’s safety claims, though details remain unclear.
Analysts say Musk’s dependence on federal agencies makes him uniquely vulnerable to political retaliation. “For someone that rants so much about government pork, all of Elon’s businesses are extremely dependent on government largesse,” said Telemetry Insight’s Sam Abuelsamid. “That makes him an easy target.”
And retaliation seems increasingly likely. President Trump has hinted at cutting federal contracts with SpaceX—an existential threat for the private aerospace company valued at $350 billion. SpaceX is currently the only U.S. firm capable of transporting astronauts to the International Space Station and has a multibillion-dollar NASA contract to send a crew to the moon in 2026.
Musk pushed back, tweeting that SpaceX would begin winding down its use of the Dragon capsule—a move that would leave the U.S. reliant on Russia’s Soyuz spacecraft. But within hours, he appeared to walk it back, saying he wouldn’t follow through, suggesting the post may have been strategic bluster.
Despite the drama, both sides have much to lose. While Musk’s businesses have flourished in part due to Trump’s previous support and deregulation efforts, Trump’s government also leans heavily on Musk’s technology—from defense applications to internet access for underserved regions via Starlink.
That interdependence is now at risk. Starlink recently secured regulatory approval in India—a key win for the satellite company. It also announced expansion into Saudi Arabia during a Middle East trip alongside Trump. Whether those deals were aided by political proximity is unclear, but if Trump turns against Starlink, future international partnerships could be jeopardized.
Meanwhile, Tesla’s financial health could take additional hits. One under-the-radar revenue stream—regulatory carbon credits—is also under threat. On the same day Trump and Musk clashed, Senate Republicans inserted language into the budget bill that would eliminate fines for gas-powered cars failing fuel standards. That change could cripple Tesla’s carbon credit sales, which brought in $595 million last quarter alone.
Tesla’s core EV sales are also under pressure. Once a darling among environmentally conscious buyers, the brand has suffered from boycotts tied to Musk’s rightward political leanings and perceived closeness to Trump. A break from Trump could help bring back liberal consumers—but that shift could take time.
Stock market reactions have already reflected the uncertainty. Tesla shares surged earlier this year on enthusiasm about its robotaxi program, but plunged over 14% Thursday after the Musk–Trump spat became public. Shares rebounded 4% Friday, but analysts say the long-term impact remains unclear.
“There are more questions than answers,” said TD Cowen analyst Itay Michaeli, who lowered his Tesla price target from $388 to $330. As of Friday, Tesla was trading at around $300.
Then there’s X, Musk’s social media platform. Once buoyed by conservative loyalty, X may now face headwinds if Trump’s base or Republican allies turn against it. Big advertisers had slowly begun to return after fleeing due to Musk’s controversial moderation policies and conspiracy-laden posts. Musk has called their exodus an “illegal boycott” and even sued some firms. But the Trump administration’s Federal Trade Commission had recently opened a probe into whether advertisers coordinated inappropriately to harm X.
Now, if Trump shifts his tone on X, it could again become a politically radioactive brand. “There’s a risk that it becomes toxic for advertisers,” said Cornell political scientist Sarah Kreps. “But any exodus would depend on how far Trump takes the fight, how long it lasts, and how it ends.”
Ultimately, both Trump and Musk are high-risk, high-reward figures who have leveraged each other for political and financial gain. Their fallout now threatens to upend carefully constructed alliances, derail landmark projects, and damage entire sectors—EVs, aerospace, telecom, and social media.
How far the feud escalates is still unknown. But what is clear is that Elon Musk, once a close ally of the president, now finds himself in Trump’s crosshairs—and that may prove more dangerous than any economic downturn.
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