Elon Musk and President Donald Trump are fighting again. Now Musk’s business interests — and the billions in government contracts they enjoy — are once again in the crosshairs.
Investors were already punishing Tesla on Tuesday, sending shares in the electric carmaker more than 4% lower in afternoon trading. The stock has experienced a late-spring rally alongside the broader market but remains down some 20% so far this year. The shares have been pummeled by a global backlash to Musk’s alliance with Trump on the campaign trail and in the White House, where the multibillionaire led a sweeping program of government cuts
Musk acknowledged there had been “some blowback” to the actions taken by his Department of Government Efficiency project that may have affected Tesla sales. Yet investors remain largely bullish on the company and its efforts to pivot away from mass-market EVs and toward self-driving taxis and robotics, pushing its market valuation back toward $1 trillion.
Tesla remains Musk’s best-known business, but its fortunes are less directly tied to the government than SpaceX, his rocket-building company. SpaceX’s $350 billion valuation largely rests on the many government contracts that fuel it. SpaceX’s work for NASA has ramped up in recent years in support of the Artemis mission to return to the moon.
Meanwhile, SpaceX’s Dragon spacecraft is currently the only active vessel capable of carrying astronauts to and from the International Space Station. SpaceX has also become essential to the Department of Defense’s missions taking satellites into orbit and today is responsible for the majority of such missions, according to Ars Technica.
SpaceX is privately held, meaning its shares don’t trade on the open market. It is thus difficult to get a real-time gauge on how worsening relations could affect the company’s fortunes. But the impact could be substantial. Since fiscal year 2000, total revenue for SpaceX and Tesla from federal unclassified contracts sits at $22.5 billion, according to Bloomberg Government data — with most of those going to the former. The Washington Post has put the figure for SpaceX alone at close to $38 billion, with $6.3 billion alone coming in 2024 — the highest annual total to date.
The dispute with Trump has also taken a chunk out of Musk’s personal net worth. After soaring to an all-time high of nearly half a trillion dollars after Trump’s election win, Musk’s publicly available wealth tally now sits at $400 billion, though that still makes him the world’s wealthiest individual by nearly $150 billion ahead of Oracle founder Larry Ellison, another Trump ally.
The Musk-Trump tiff first exploded into public view last month, shortly after Musk formally stepped down from his special government employee role and criticized the massive spending and tax cut bill that Republican senators passed Tuesday. Trump responded at the time by threatening to “terminate Elon’s Governmental Subsidies and Contracts.”
Musk, in turn, said he would begin “decommissioning” the Dragon, only to reverse course hours later after an X user advised him and Trump to “cool off and take a step back for a couple of days.”
Before their initial flare-up subsided, Musk announced he would be reining in his political spending weeks after a candidate he had backed lost a key Wisconsin Supreme Court race. Some analysts believe the current relapse in tensions between the two men will be short-lived given Musk’s reliance on the government, and vice-versa.
Still, Musk is now discussing launching his own political party to address the U.S.’s fiscal imbalances, which he believes Trump’s bill will exacerbate — a contention supported by the nonpartisan Congressional Budget Office. While the South Africa-born executive is ineligible to run for office, any candidate he backed for national office would likely face immediate conflict-of-interest questions.