Elon Musk’s explosive falling out with Donald Trump has sent shockwaves through both Wall Street and Washington. Once viewed as a political ally, Musk now finds himself at odds with the president a feud that threatens the stability of his sprawling tech empire and its critical ties to the U.S. government.
The conflict erupted on social media, triggering a 14% plunge in Tesla’s share price before a partial rebound. Investors had hoped Musk’s promise to step back from politics would translate to a renewed focus on core ventures like Tesla, SpaceX, and X (formerly Twitter). Instead, his political spat appears to be intensifying at a time when many of his companies are underperforming.
Tesla, in particular, is facing a rocky road. Sales dropped 20% in Q1, profits plunged 70%, and the once-dominant EV maker is now struggling to catch up in the autonomous vehicle race. Veteran tech journalist Kara Swisher declared Tesla “finished” unless it can pivot successfully into robo-taxis, with an important launch due in Austin this month.
Meanwhile, Musk’s erratic leadership has alienated long-time investors. “It’s the dumbest thing you could do to think you have more power than the president,” said Ross Gerber, a former Tesla bull now selling off his stake.
Trump’s threat to cut off federal contracts worth an estimated $38 billion looms large. SpaceX, which ferries NASA astronauts to the ISS, and Starlink, which powers key military and emergency systems, are too deeply embedded to be easily replaced. But even symbolic actions from the White House could rattle investor confidence further.
Some experts argue the fallout might help Musk rehabilitate his public image with critics who turned on him for his earlier closeness to Trump. But even so, questions remain about Musk’s focus, motivations, and the future of his companies.
As Musk and Trump go from allies to adversaries, their uneasy dependence on each other may define the next chapter not just in tech, but in American power.
