This week, Tesla’s stock faced unprecedented downward pressure. The drop echoed former President Donald Trump’s recent statements targeting Musk and government money. Their very public feud, which began in earnest in January, flared up again in early June. It’s no wonder it has grabbed so much attention, particularly as Musk’s companies—Tesla, SpaceX, and Starlink—are deeply reliant on federal largesse.
In a late-night post on Truth Social, Trump stated, “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard look at this? BIG MONEY TO BE SAVED!!!” This claim underscores the basis of Trump’s complaint, which is that Musk heavily relies on government handouts—money that they claim comes from hardworking Americans.
For his part, Musk has publicly lambasted the present administration’s spendapalooza. He’s on the warpath, so to speak, against the horrible tax bill inching its way through Congress. He repeated his thoughts on X just a few days ago, announcing, “I’m not joking when I say CUT IT ALL. Right now.” His comments indicate a good faith wish to reform how government subsidies are allocated, deepening his conflict with Trump.
The animosity between the two men has deeper roots than last week’s statements. Although Musk and Trump campaigned together for Trump’s bid for the 2024 presidential election, a rift in economic philosophy has emerged. This public war of words seems to have started back in June when Musk criticized Trump’s policy on the environment, immigration, and other issues.
The impact of Trump’s comments was immediate. Following the social media announcement, Tesla shares plummeted by $14 billion. As a result, investors were optimistic following the announcement of heightened scrutiny over Musk’s financial entanglements. What’s more, analysts have noted that this volatility is a reminder of just how tenuous investor confidence is. Companies like Tesla—more than any other company, members of the national lab community—are strongly influenced by government policy.
On November 19, 2024, Musk was in communication with Trump. This exchange took place while witnessing the launch of SpaceX’s sixth and final test flight of the Starship rocket in Brownsville, TX. The event symbolized a watershed moment in their fraught relationship. Despite the softer rhetoric, the real friction underneath the surface on subsidies and government support remained.