Washington, D.C., June 11, 2025— Billionaire Elon Musk’s public apology for his social media attacks on U.S. President Donald Trump has cast a spotlight on the future of $38 billion in government contracts held by Tesla and SpaceX, as the tech mogul scrambles to preserve critical federal partnerships amid a heated public feud, sources told BBC News.
Contracts at Risk Amid Political Tensions
Musk’s now-deleted posts on X, which branded Trump’s tax bill a “disgusting abomination” and made unverified claims about ties to Jeffrey Epstein, prompted Trump to threaten the termination of government contracts vital to Tesla and SpaceX. Valued at $38 billion (£28 billion), these contracts include NASA’s reliance on SpaceX for crewed missions and Department of Defense deals for satellite launches, alongside Tesla’s federal electric vehicle subsidies. Musk’s brief 129-day stint at the Department of Government Efficiency (DOGE) intensified the feud, causing a 4.7% dip in Tesla’s stock last week, though it rebounded 2.8% after Musk’s apology on June 11.
“I regret some of my posts about President @realDonaldTrump last week. They went too far,” Musk stated on X. The apology follows Trump’s June 9 NBC interview, where he called Musk “disrespectful” and hinted at severing contracts, citing Musk’s criticism of the “One Big Beautiful Bill.” The bill, currently under Senate review, includes tax breaks and increased defense spending, which Musk warned could spark a recession by Q3 2025.
ALSO READ | Did Elon Musk Bet Wrong on Trump?
Strategic Apology to Protect Business Interests
The potential loss of contracts poses a significant threat to Musk’s empire. SpaceX’s $14 billion NASA deals, including Artemis program missions, are critical to its Starship development, while Tesla’s federal subsidies bolster its edge against competitors like China’s BYD, which captured 18% of the global EV market in Q1 2025. Trump’s softened stance on June 10, noting he would maintain SpaceX’s Starlink services at the White House, suggests a possible thaw, but analysts remain cautious. “Musk’s apology is a pragmatic move to safeguard his companies,” said Emily Tran, an analyst at Horizon Capital. “However, Trump’s unpredictable stance keeps the contracts vulnerable.”
Musk’s $277 million donation to Trump’s 2024 campaign had cemented their alliance, making the fallout particularly jarring. The apology may ease tensions, but with former Trump aide Steve Bannon calling for Musk’s deportation and Vice President JD Vance urging reconciliation, the path forward remains uncertain. A prolonged rift could disrupt NASA’s lunar ambitions and weaken Tesla’s U.S. market position, especially as Chinese EV makers expand globally.
Did you know?
SpaceX’s government contracts, including a $2.6 billion NASA deal for lunar landers, account for over 35% of its annual revenue, underscoring their importance to Musk’s space ambitions.
Investor Confidence and Market Reactions
The Musk-Trump feud has rattled investors, with Tesla’s stock volatility reflecting broader concerns about the stability of Musk’s business ventures. The 4.7% stock drop last week wiped out $45 billion in Tesla’s market value, though the partial recovery post-apology signals cautious optimism. SpaceX, while privately held, faces indirect pressure as institutional investors question its reliance on government contracts, which constitute 35% of its revenue.
“Investors are watching closely,” said Clara Hughes, a market strategist at Apex Analytics. “Any hint of contract cancellations could trigger a broader sell-off, especially given Tesla’s exposure to U.S. policy shifts.” Musk’s apology has tempered immediate fears, but sustained uncertainty could erode confidence in both companies’ long-term growth.
Broader Implications for Public-Private Partnerships
The feud underscores the fragility of public-private partnerships in the U.S., particularly when personal disputes between high-profile figures spill into policy and business realms. Musk’s brief DOGE tenure aimed to streamline government spending, but his exit and subsequent clash with Trump highlight the challenges of aligning private sector innovation with political agendas.
As the Senate debates Trump’s tax bill, which could reshape federal funding for space and clean energy, Musk’s ability to navigate this fallout will influence the broader ecosystem of government-backed tech ventures. Analysts suggest that a successful reconciliation could strengthen SpaceX’s role in NASA’s 2026 lunar mission, while failure risks ceding ground to competitors like Blue Origin.
Comments (0)
Please sign in to leave a comment