Trump-Musk Feud Heats Up: Tesla and SpaceX Under Scrutiny Amidst Renewed Tensions

Elon Musk and former President Donald Trump are squaring off again, resulting in renewed scrutiny on Musk’s businesses and the substantial government contracts they receive. Investors reacted negatively, with Tesla’s stock losing over 4% on a recent Tuesday afternoon. Although the stock experienced a resurgence in the spring alongside broader market improvements, it remains down approximately 20% for the year. Much of Tesla’s decline is attributed to the backlash stemming from Musk’s alignment with Trump both during the campaign and in office, where Musk pushed for significant government spending cuts.

Despite some backlash affecting Tesla sales, Musk noted that most investors still have a positive outlook for the company. The firm is transitioning its focus from mass-market electric vehicles to self-driving taxis and robotics, which is helping its market valuation inch closer to $1 trillion. Although Tesla is Musk’s most recognized venture, its financial success is less directly tied to government contracts compared to SpaceX, his space exploration enterprise. SpaceX, valued at around $350 billion, relies heavily on government contracts, particularly through its collaboration with NASA and support for the Artemis missions.

SpaceX’s Dragon spacecraft remains the only active vehicle capable of transporting astronauts to the International Space Station and has become a crucial player in the Department of Defense’s satellite missions. The company’s financial details are less transparent due to its private status, but reports indicate significant revenues from government contracts, totaling $22.5 billion since 2000, with the majority benefiting SpaceX. Musk’s personal wealth has also been affected amid the ongoing feud, dropping to $400 billion, but he remains the wealthiest individual globally. Their contentious relationship ignited in public last month, following Musk’s resignation from a role as a government employee and his criticism of Trump’s significant spending and tax cuts.

Trump responded by threatening to terminate Musk’s government subsidies and contracts. In light of the friction, Musk has hinted at potentially launching his own political party to tackle the U.S.’s fiscal challenges, a move that adds further complexity to his business operations and political affiliations.