The dramatic public breakdown between Donald Trump and Elon Musk has escalated into a high-stakes confrontation with massive political and financial implications. Trump has threatened to revoke federal contracts awarded to Musk’s companies, while Musk’s opposition to the president’s legislative agenda could derail one of Trump’s signature bills in US Congress. At risk are billions of dollars in government contracts, major business expansions, and the GOP’s control of the House, the Wall Street Journal reported.
Musk’s federal pipeline under threat
Trump’s threat to cancel federal contracts with Musk’s companies targets one of the richest veins in Musk’s empire. SpaceX, which launches astronauts for NASA and satellites for the Pentagon, holds multiple contracts worth billions. The company is NASA’s primary partner for transporting astronauts to the International Space Station and is central to the U.S. plan for returning to the Moon.
SpaceX is also the backbone of U.S. satellite launches, with agreements including a $5.9 billion deal for military payloads and a $1.8 billion classified contract with the National Reconnaissance Office. Starlink, Musk’s satellite internet network, has played a pivotal role in Ukraine’s defence against Russia — a point that could become politically sensitive in Washington.
If these contracts are revoked or delayed, SpaceX could face major operational and financial disruptions. An administration official warned Musk may struggle to find support inside the Trump administration now.
Tesla’s future hinges on regulation — and goodwill
Tesla faces a different kind of threat: regulatory roadblocks. Musk has been lobbying for federal rules to permit nationwide deployment of self-driving cars. Without federal standards, states continue to control autonomous vehicle approvals, creating a fragmented regulatory environment that slows Tesla’s ambitions.
Transportation Secretary Sean Duffy’s visit to Tesla’s Texas headquarters in April signalled progress. But following the feud, Musk’s access to federal policymakers may dwindle — just as Tesla gears up to launch its autonomous taxi service.
The company is also vulnerable to changes in emissions policies. Tesla earns hundreds of millions each quarter by selling emissions credits to other automakers. That stream is at risk if Congress or the administration dismantles strict fuel economy standards or blocks California’s ability to set its own rules.
Tesla’s stock tumbled $152 billion in market value on Thursday — the worst single-day loss in company history — underlining investor anxiety over Musk’s fight with Trump.
Trump’s bill in jeopardy
Trump has bundled his legislative priorities — tax cuts, border funding, and social program rollbacks — into a single bill that barely passed the House, 215 to 214. With a razor-thin margin, even a few defectors could tank the bill when it returns for final passage.
Musk, calling the bill a “disgusting abomination,” has warned he will fund campaigns against lawmakers who support it. The entrepreneur has already spent over $250 million supporting Trump’s reelection and now threatens to mobilise that money against him.
House Republicans are feeling the pressure. Three GOP members — including Reps. Thomas Massie and Warren Davidson — have broken ranks. Another, Rep. David Schweikert, signalled he won’t back the bill without major changes, echoing Musk’s concerns about the deficit.
While the Trump camp hopes voters will rally behind the president, Musk’s influence on X, with over 220 million followers, remains potent. His suggestion of launching a new political party gained traction quickly, with 81% of 3.5 million respondents voicing support in a poll he posted.
The cost of a permanent rift
For Musk, the consequences could extend across his companies — from SpaceX’s Moon missions to Tesla’s AI ventures and Starlink’s military footprint. For Trump, losing Musk’s endorsement and media megaphone on X could weaken the GOP’s 2026 midterm prospects.
Both men once found value in their alliance. Now, they may find out just how much it cost them to break it.
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