The fallout between Trump and Musk has created significant implications for both these influential figures.
The spat between US President Donald Trump and world’s richest person Elon Musk, is getting uglier as each hour of the day passes. From trading harsh barbs to threats, it’s a fight like no other. And it keeps getting worse! Once avid supporters of each other, Donald Trump and Elon Musk have turned on each other in the blink of an eye!The fallout between Trump and Musk has created significant implications for both these influential figures, raising concerns about potential consequences. The situation presents substantial political and financial risks for both billionaires involved.For Musk, the potential impact was immediately visible as investors in Tesla, which Musk heads, turned nervous. Tesla saw its stock crash and the company lost over $150 billion in market cap – its biggest single day loss.On the other hand, Donald Trump faces a delicate situation in the House, where losing more than three Republican votes could halt the passage of the ‘One Big Beautiful Bill’. It is this bill that has caused the rift between Trump and Musk. The House Freedom Caucus members have expressed reservations about the bill’s impact on the deficit, echoing Musk’s criticisms.What Does Donald Trump Have To Lose?Donald Trump’s comprehensive legislative proposal, dubbed the “One Big Beautiful Bill,” includes his core policy ambitions. It combines tax cuts and enhanced border security with reductions to Medicaid and food aid programs. Though narrowly approved in the House with a 215–214 vote, the bill faces further scrutiny in the Senate before returning to the House. A significant challenge to its success comes from Elon Musk, who has condemned the bill’s projected $2.5 trillion federal deficit increase and called it a “disgusting abomination,” warning politicians who support it of electoral consequences.Musk’s public criticism carries weight, particularly among fiscally conservative lawmakers. With a history of financially supporting Trump—including over $250 million in contributions to his reelection campaign—Musk’s influence is potent. Now, he threatens to redirect that financial muscle against supporters of the bill, potentially backing primary challengers or deploying subtler tactics to sway Republican votes, according to a Wall Street Journal report. Although most GOP lawmakers remain loyal to Trump, Musk only needs a few defectors to derail the bill’s progress.Also Read | ‘Electric cars that nobody else wanted…’: Donald Trump’s shocking words on Elon Musk; says Biden should have terminated Musk’s subsidiesOnly a handful of Republican lawmakers, such as Reps. Thomas Massie and Warren Davidson have publicly aligned with Musk’s stance. Another Republican, Rep. David Schweikert, has voiced the need for significant amendments before pledging support, emphasizing concerns over the scale of national debt and validating Musk’s warnings. Meanwhile, internal party tensions rise, with a senior GOP member noting that Musk’s opposition is straining relationships within Republican ranks and undermining legislative momentum.The fallout from a Musk-Trump rift could extend far beyond this bill. With Republicans holding only a slim majority in the House, Musk’s disapproval—and the potential mobilization of his vast social media influence on X—could impact critical midterm races in 2026. Amplifying that possibility, Musk floated the idea of launching a new political party, receiving strong support from his followers in an online poll. Such a move could disrupt existing political dynamics and reshape the conservative landscape in the USWhat Does Elon Musk Have To Lose?Elon Musk, who leads Tesla, SpaceX and xAI, has big government contractual agreements whilst seeking regulatory modifications to fulfil his pledge to shareholders about transforming Tesla into a trillion-dollar AI and robotics enterprise.Also Read | Tesla stock price crash wipes out $150 billion! Investors dump Elon Musk’s company as clash with Donald Trump escalates; fear US President won’t be a ‘nice guy’On Thursday, Trump issued a warning about cancelling government agreements with Musk’s enterprises—a suggestion his supporters have advocated since the SpaceX chief executive began criticising Trump’s signature legislation this week, according to an individual familiar with the president’s thinking.Impact on SpaceX
- SpaceX, under Elon Musk’s leadership, has built a deep and strategic relationship with multiple branches of the US government, including NASA, the Pentagon, and intelligence agencies. The company plays a central role in launching military satellites, supporting Ukraine via its Starlink internet network, and transporting astronauts to the International Space Station—making it an important partner. NASA alone has committed nearly $10 billion to SpaceX through contracts for space-station missions and lunar exploration projects, including developing Starship and a deorbiting craft for the ISS.
- The company also relies on regulatory bodies like aviation safety and environmental authorities to support its launch operations. SpaceX recently secured a $5.9 billion agreement to deliver national-security payloads and maintains a classified $1.8 billion partnership with the National Reconnaissance Office for satellite surveillance. These collaborations underline SpaceX’s expanding influence in both civilian and military aerospace sectors.
- However, despite SpaceX’s government ties, political uncertainty looms. A White House official remarked that Musk currently lacks allies within Donald Trump’s political circle—suggesting potential future complications in securing support or contracts if Trump returns to office. Previously, Musk seemed well-positioned to gain more government business, including participation in Trump’s proposed “Golden Dome for America” missile-defense project.
Impact on Tesla
- Tesla requires federal-level regulatory modifications to deploy nationwide autonomous vehicles, as current regulations leave control of self-driving vehicles on public roads to individual states.
- The company’s inability to implement autonomous driving features has been consistently attributed to regulatory obstacles. Tesla’s investments in autonomous vehicles and humanoid robots rely heavily on vehicle sales, which have declined significantly in the US and European markets, coinciding with closer ties between Musk and Trump.
- Tesla faces additional challenges from potential White House initiatives to relax fuel economy and emissions regulations. The company generates substantial quarterly revenue through selling regulatory credits to competing automobile manufacturers who must purchase them to avoid penalties for exceeding emission limits.
- The recent Congressional decision to remove California’s authority to establish independent tailpipe emission standards has effectively eliminated a primary catalyst for electric vehicle investment in the United States.
- As the spat between Trump and Musk escalated, Tesla’s shares crashed 14% wiping out a whopping $150 billion from its market capitalization.
Also Read | Will the Donald Trump administration be forced to give billions of dollars in tariff refunds?
