Trump suggests government may withdraw contracts and subsidies from Musk’s companies amid escalating feud.
President Donald Trump’s recent comments have significantly strained his relationship with Elon Musk, suggesting that the government could cut its financial ties with Musk’s businesses. On Truth Social, Trump stated, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.” This statement came as a surprise, especially since Musk had previously been a prominent supporter of Trump’s political ambitions. The extent of the financial benefits Musk’s companies, mainly SpaceX and Tesla, receive from government contracts and subsidies is estimated to be substantial.
Reports suggest that Musk’s firms could benefit from as much as $38 billion in federal spending, with SpaceX President Gwynne Shotwell estimating $22 billion just for SpaceX. However, specifics about the contracts are often classified, making it difficult to ascertain exact numbers. SpaceX plays a crucial role for NASA, particularly in transporting astronauts to the International Space Station. Currently, NASA’s only alternative is the costly option of using Russian spacecraft.
Notably, SpaceX is also tasked with future missions, including plans for lunar travel and beyond. In response to Trump’s comments, Musk announced plans to “decommission” SpaceX’s Dragon spacecraft, raising concerns about the implications of such a decision for ongoing space missions. A NASA spokesperson reaffirmed the agency’s commitment to its objectives in space. Tesla has also benefited from significant regulatory credits, although Musk claims that these credits primarily serve rival companies now.
Following Trump’s threats, Tesla’s stock fell sharply, exacerbating the company’s recent struggles. This public spat highlights a remarkable turnaround, given Musk’s financial support of Trump during his campaign. As tensions rise, there’s worry about potential renewed scrutiny of Musk’s businesses, reminiscent of investigations that were paused when Trump took office.