The world’s wealthiest individual, Elon Musk, could be staring at major financial losses due to his escalating clash with former U.S. President Donald Trump.
Their growing feud may disrupt Tesla’s self-driving car rollout, limit NASA contracts for SpaceX, stall Starlink’s international expansion, and lead to further advertising losses for Musk’s social media platform, X.
That said, the actual impact hinges on how far Trump is willing to take the conflict.
“Trump’s not exactly known for letting things slide,” auto analyst Sam Abuelsamid joked. Turning serious, he warned, “For someone who rails against government spending, Musk’s ventures are deeply reliant on federal support—making him vulnerable.”
While the U.S. government also has stakes in Musk’s ventures, the potential fallout looms larger for the entrepreneur.
This spat comes just days before Tesla is set to unveil its robotaxi prototype in Austin, Texas—a crucial event for the EV maker, which is facing sluggish sales. Federal safety regulators could become a major hurdle for this launch if Trump pressures them to scrutinize the rollout.
Even prior to the dispute, the National Highway Traffic Safety Administration (NHTSA) had requested performance data on Tesla’s autonomous vehicles under poor visibility. The agency is already investigating 2.4 million Teslas over crash incidents involving its self-driving software.
The Department of Justice is also reportedly examining Tesla’s safety record, though its current findings remain undisclosed.
Following the robotaxi announcement, Tesla’s stock surged 50%. But after the Trump-Musk rift emerged, it plummeted over 14% on Thursday before rebounding slightly on Friday.
“Tesla’s recent rally was driven almost entirely by excitement over autonomous taxis,” said Morningstar analyst Seth Goldstein. “This political fallout could hurt that momentum.”
Another vulnerable area for Tesla is its lucrative carbon credit business. On the same day the feud escalated, Republican senators inserted language into Trump’s budget plan to eliminate penalties for fuel-inefficient cars—undermining the market for Tesla’s emissions credits.
While Musk has publicly minimized the significance of this revenue stream, it remains substantial. In Q1 alone, Tesla earned $595 million from credit sales, even as its overall revenue declined.
Musk’s political affiliations have already triggered backlash. His previous alignment with Trump alienated many eco-conscious customers, resulting in showroom boycotts. If Musk has distanced himself from Trump, some of those customers may return—but that remains uncertain.
Some analysts once speculated that Trump supporters in red states might become Tesla buyers. That now seems unlikely.
“There are more questions than answers after Thursday’s developments,” TD Cowen’s Itay Michaeli noted. His target price for Tesla has dropped from $388 to $330. On Friday, shares hovered around $300.
Tesla has not commented publicly on the situation.
Trump, for his part, has threatened to cut federal contracts with SpaceX—posing a significant risk to a company valued at $350 billion and heavily involved in U.S. space operations, including NASA launches and future moon missions.
SpaceX’s crew transport services are critical to the U.S. space program. Without it, NASA would have to rely on Russia’s Soyuz capsules—a politically sensitive alternative.
Musk hinted at retaliation, tweeting that SpaceX might decommission its Dragon spacecraft. Hours later, he reversed course, clarifying in a reply to another user that no such move would happen.
Starlink, SpaceX’s satellite internet arm, has also benefited from Musk’s ties with Trump, securing service approvals in countries like Saudi Arabia, Bangladesh, Pakistan, and India—where the service recently received a crucial license. Still, it’s unclear how much influence politics had in those deals.
Meanwhile, X is seeing some advertisers return after leaving over concerns about misinformation and conspiracy content. Musk has called their exit an “illegal boycott” and sued several firms, while the Trump administration launched an FTC investigation into possible collusion among advertisers.
Now, brands may face a new risk: the possibility that Trump will turn against X.
“If Trump grows hostile toward the platform, it could once again become politically toxic for big advertisers,” said Cornell political scientist Sarah Kreps. She noted, however, that whether an advertiser exodus happens will depend on how intense and prolonged the feud becomes.
