Elon Musk’s expensive divorce from Trump

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The once-close alliance between Donald Trump and Elon Musk has ended in a public and bitter split, sending shockwaves through the business and political landscapes. For Musk, the fallout has been immediate and severe: after a heated exchange with Trump on X (formerly Twitter), Tesla’s shares plummeted, wiping out $150 billion in market value in just one day. This dramatic loss highlights the immense risks of clashing with a sitting US president, and it may only be the beginning of Musk’s troubles.

Trump has now openly targeted Musk, threatening to cancel government contracts and subsidies that are crucial to Musk’s business empire. On Truth Social, Trump declared that the “easiest way to save money in our budget” is to terminate Musk’s governmental subsidies and contracts—a direct threat with potentially devastating consequences for Musk’s companies.

Tesla, the world’s most valuable car company, owes much of its growth to government support, including over $3 billion in tax credits since 2007. These incentives made Tesla vehicles more affordable and helped the company cut costs. However, Trump’s latest legislation has slashed these benefits, leaving Tesla more exposed to competition and investor uncertainty.

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SpaceX, Musk’s space venture, is also at risk. The company has earned nearly $21 billion from US government contracts since 2008, and the full value of its NASA agreements could reach $90 billion. SpaceX’s dominance in launching rockets and supporting NASA’s moon program is now threatened if Trump follows through on his threats to cut contracts.

Musk’s other ventures, including Neuralink, face regulatory scrutiny, and both Tesla and SpaceX are already under investigation by various US agencies. With the political cover gone and legal challenges mounting—including a lawsuit from the SEC over Musk’s acquisition of Twitter—Musk is more vulnerable than ever.

The Trump-Musk breakup is more than a personal feud; it’s a clash of two titans who have shaped industries and headlines. If this conflict escalates, it could rattle markets and reverberate through Washington.