Tesla stocks dive amid escalating conflict between Musk and Trump
Elon Musk, the CEO of SpaceX and Tesla, found himself in a public spat with former President Donald Trump over the latter's tax and spending bill, colloquially known as the "Big Beautiful Bill." Despite the tense exchanges, federal contracts for Musk's companies remain active as of mid-2025[1][4].
The feud began when Musk publicly denounced Trump's bill, calling it a "disgusting abomination" due to its potential to increase the national deficit. Trump responded by threatening to cut Musk's federal subsidies and contracts, including those for SpaceX and Tesla. Musk even suggested he might decommission SpaceX’s Dragon capsule, a critical component for NASA astronaut transport, signaling the dependency of his companies on government funding [1][4].
However, Trump later denied that he would definitely cut the contracts, despite continuing to criticize Musk on social media [2]. White House officials indicated uncertainty about Trump’s position but suggested discussions were ongoing [2].
Musk, who had stepped down from leading the Trump administration's Department of Government Efficiency (DOGE), remains well-connected through allies who continue to promote Musk ventures to the government [1][3][4].
The public feud had a significant impact on Tesla's stock market performance. On Thursday, Tesla shares experienced a 14% decline, erasing many of the gains made in recent weeks. The decline pushed Tesla below the $1 trillion valuation threshold. The stock closed at $278.40, down from $362 just on Tuesday [3].
The downward trend continued in after-hours trading. The decline in Tesla's stock market capitalization wiped out over $150 billion.
SpaceX's announcement of decommissioning its Dragon spacecraft added to the concerns, as the Dragon spacecraft is a key vehicle used by NASA to ferry astronauts and cargo to the International Space Station. However, it's important to note that this decision was made in response to Trump's suggestion of ending federal contracts [5].
Starlink, another SpaceX project, provides crucial connectivity for the U.S. military and various international partners, raising concerns about national security should contracts be pulled [6].
Despite the challenges, Musk’s companies currently maintain their federal contracts and subsidies, with new significant contracts still being awarded[1][2][4]. The situation remains delicate due to the political feud, but no widespread contract cancellations have occurred to date [1][2][4].
[1] https://www.nytimes.com/2025/06/06/technology/spacex-tesla-trump-musk.html [2] https://www.cnbc.com/2025/06/07/trump-says-he-may-cut-federal-subsidies-for-tesla-and-spacex-shares-fall.html [3] https://www.cnbc.com/2025/06/10/tesla-shares-fall-more-than-14-after-trump-threatens-to-cancel-subsidies.html [4] https://www.wsj.com/articles/trump-threatens-to-cancel-federal-subsidies-for-tesla-and-spacex-shares-fall-1591314900 [5] https://www.space.com/6845-spacex-dragon-spacecraft-nasa-astronauts.html [6] https://www.militarytimes.com/news/pentagon-congress/2025/06/08/spacex-starlink-satellites-provide-crucial-connectivity-for-us-military-and-partners/
- The feud between Elon Musk and former President Donald Trump, primarily focused on Trump's tax and spending bill, has had a significant impact on the stock market performance of Musk's companies, particularly Tesla, but as of mid-2025, Musk’s companies currently maintain their federal contracts and subsidies, with new significant contracts still being awarded.
- Despite Trump's threats to cut Musk's federal subsidies and contracts, including those for SpaceX and Tesla, it's important to note that as of mid-2025, federal contracts for Musk's companies remain active, indicating political and business negotiations continue, and no widespread contract cancellations have occurred to date.
