The escalating public dispute between President Donald Trump and entrepreneur Elon Musk has placed Musk’s companies, including Tesla and SpaceX, at risk of losing substantial federal subsidies and contracts. This development follows Musk’s criticism of Trump’s proposed “One Big Beautiful Bill,” a legislative package that includes significant tax reforms and spending measures.
In response to Musk’s public dissent, President Trump suggested terminating federal support for Musk’s enterprises. On Truth Social, Trump stated, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.”
Financial Implications for Musk’s Enterprises
An analysis by The Washington Post indicates that Musk’s companies have received approximately $38 billion in government contracts, loans, subsidies, and tax credits over the past two decades, with nearly two-thirds allocated within the last five years.
SpaceX, Musk’s aerospace company, has been a significant beneficiary of federal contracts, receiving over $3.8 billion in the 2024 fiscal year alone. These funds primarily support NASA missions, including transporting astronauts and cargo to the International Space Station and developing a lunar lander for the Artemis program.
Tesla, while receiving fewer direct federal grants, benefits indirectly through various programs. In 2024, Tesla reported earning nearly $2.8 billion by selling regulatory credits to other automakers to help them meet emissions standards. These credits are influenced by both federal and state-level policies.
Market Reaction and Investor Concerns
The feud has had immediate financial repercussions. Tesla’s stock experienced a significant decline, dropping 14% and erasing approximately $150 billion in market value. Analysts attribute this downturn to heightened political risks and uncertainties surrounding Tesla’s future government relations and funding.
Potential Impact on Government Projects
SpaceX’s role in U.S. space and defense initiatives complicates the potential severance of federal ties. The company is integral to NASA’s operations, including the Artemis missions aimed at returning humans to the Moon. Additionally, SpaceX’s Starlink network comprises a significant portion of operational satellites, supporting various governmental functions.
