Washington, DC, June 6, 2025 - A once-unshakable alliance between President Donald Trump and billionaire Elon Musk has imploded into a fierce public feud, marked by Musk's call for Trump's impeachment and Trump's threat to sever billions in government contracts for Musk’s companies, Tesla and SpaceX.
The clash, erupting over a contentious tax and budget bill, has sent Tesla’s stock plummeting 14.3%, erasing $150 billion in market value in a single day, marking the company’s worst trading session since 2020. As the world’s most powerful politician and its richest man trade barbs, the fallout threatens significant economic and political consequences for both.
From Bromance to Battle: The Feud’s Origins
The rift began when Musk, former head of the Department of Government Efficiency (DOGE), publicly criticized Trump’s “One Big Beautiful Bill Act,” a sprawling tax and spending proposal. Musk, who spent nearly $300 million supporting Trump’s 2024 campaign, called the bill a “disgusting abomination” on his social media platform X, citing its projected $2.4 trillion deficit increase.
Trump, who had praised Musk as a “leader” in a February Fox News interview, countered that Musk’s opposition stemmed from the bill’s elimination of electric vehicle (EV) tax credits worth up to $7,500 per buyer, critical for Tesla’s bottom line. “Elon knew the inner workings of this bill better than almost anybody,” Trump said in the Oval Office alongside German Chancellor Friedrich Merz, adding that Musk “went CRAZY” after losing his White House role.
Musk fired back, denying prior knowledge of the bill’s details and accusing Trump of lying. “This bill was never shown to me even once and was passed in the dead of night,” Musk posted on X. The feud escalated when Musk suggested Trump’s impeachment, endorsing a post proposing Vice President JD Vance as a replacement. In a provocative move, Musk also claimed, without evidence, that Trump was withholding Jeffrey Epstein’s files due to personal involvement, a charge that drew sharp attention but lacked substantiation.
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High Stakes for Tesla and SpaceX
Trump’s threat to “terminate Elon’s governmental subsidies and contracts” could cost Musk’s empire billions. SpaceX, a linchpin of U.S. space exploration, has secured $22.5 billion in federal contracts since 2000, including $3.8 billion in 2024 alone for NASA and Pentagon programs. Its Dragon spacecraft is the only U.S. vehicle currently capable of ferrying astronauts to the International Space Station (ISS).
Musk briefly announced plans to decommission Dragon. “In light of the President’s statement, SpaceX will begin decommissioning its Dragon spacecraft immediately, before retracting the threat hours later, citing a follower’s advice to “cool off.” NASA emphasized it would continue working with industry partners to meet space objectives.
Tesla, meanwhile, faces a potential $1.2 billion profit hit from the loss of EV tax credits, alongside $2.8 billion in regulatory credits earned last year. The company’s stock plunge reflects investor fears that Musk’s political gambit could erode its competitive edge in a crowded EV market. SpaceX’s Starlink, poised to upgrade the FAA’s air traffic control systems, also risks losing a multibillion-dollar contract. The financial toll has rattled markets, with analysts noting that neither Trump nor Musk is likely to back down easily.
Political and Economic Ripples
The feud’s timing is precarious. Trump’s bill, narrowly passed by the House, faces resistance in the Senate, where Musk’s lobbying could sway fiscally conservative Republicans. His call for a new political party to represent “the 80% in the middle” signals a potential challenge to Trump’s GOP dominance.
Meanwhile, Trump’s threats extend beyond contracts, with hints of reviving Biden-era investigations into Musk’s businesses. The president’s allies, including Steve Bannon, have called for Musk’s deportation, escalating the personal stakes.
Musk’s political pivot has already sparked protests at Tesla sites in the U.S. and Europe, contributing to a sales dip. His focus on politics, coupled with allegations of heavy drug use reported by The New York Times, has raised concerns among investors about his divided attention. Trump, however, remains resilient, leveraging his congressional majorities and public support to push his agenda, including a Mars mission that relies on SpaceX’s expertise.
Did You Know?
SpaceX’s projected 2025 revenue of $15.5 billion surpasses NASA’s entire budget, highlighting the growing dominance of private companies in space exploration.
What’s Next?
The path forward is uncertain. Musk’s influence within the Republican base, bolstered by his $300 million campaign investment, could fracture Trump’s coalition if he funds challengers in the 2026 primaries. Conversely, Trump’s willingness to weaponize federal power, evidenced by his recent probe into Joe Biden’s administration, poses a direct threat to Musk’s operations.
Both men, known for their confrontational styles, appear entrenched, with Musk signaling openness to reconciliation but maintaining his critique of Trump’s tariffs, which he predicts will trigger a recession by late 2025.
The feud could disrupt U.S. space ambitions, delay Tesla’s growth, and reshape the GOP’s fiscal debate. For now, the clash between these titans dominates headlines, leaving markets and policymakers bracing for the next salvo.
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