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From Bromance to Brink: How the Trump-Musk Feud Reshaped Tesla, SpaceX, and Beyond

General Report June 7, 2025
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TABLE OF CONTENTS

  1. Evolution of the Musk-Trump Partnership: From Advisor to Adversary
  2. Commercial Impact on Tesla: Stock, Sales, and Competition
  3. SpaceX Under Strain: Contractual and Operational Risks
  4. Organizational and Workforce Concerns at DOGE
  5. Musk’s Strategic Refocus and Future Outlook
  6. Conclusion

1. Summary

  • As of June 2025, the abrupt end of Elon Musk's political alliance with President Donald Trump has catalyzed significant shifts across Musk’s business landscape, marking the culmination of a 130-day partnership that has left a series of socio-economic reverberations. Over this period, the once-cooperative relationship deteriorated into a public feud characterized by sharp criticisms, ultimately impacting Musk’s enterprises in profound ways.

  • The timeline reveals that Musk's role as an unpaid advisor in Trump’s administration began with substantial promises, notably leveraging his influence at the Department of Government Efficiency (DOGE) to advocate for reductions in federal spending. However, ongoing tensions eventually led to public disagreements, particularly over economic policies that Musk deemed irresponsible. By early June 2025, their contentious split had intensified Musk's challenges, triggering a 14% drop in Tesla's stock price and jeopardizing critical government contracts for SpaceX.

  • Amidst concerns regarding internal dynamics and job security within DOGE, reports indicate rising anxiety among staff, underscoring the personal toll of political power struggles. With Tesla facing declining sales and intense competition from Chinese electric vehicle manufacturers, it became evident that Musk’s embrace of political influence had stirred backlash among a core customer base, threatening the brand's identity and market position.

  • Nevertheless, this turbulent landscape has prompted a strategic reorientation for Musk, who now aims to refocus on the core operations of both Tesla and SpaceX while reigniting innovation in artificial intelligence and advancing plans for a robotaxi service in Austin, Texas. This renewed commitment marks a critical shift back from the political fray toward a sustainable pathway for recovery and growth, signaling Musk's determination to restore investor confidence and clarify the company’s vision.

2. Evolution of the Musk-Trump Partnership: From Advisor to Adversary

  • 2-1. Musk’s role in Trump’s administration

  • Elon Musk's entry into Donald Trump's administration marked a significant evolution in their relationship, showcasing a blend of political and personal dynamics. Appointed as an unpaid advisor, Musk became the face of the Department of Government Efficiency (DOGE) shortly after Trump's election in late 2024. His influence during this period was considerable; Musk not only supported Trump with nearly $300 million in campaign contributions but was also involved in policy discussions, particularly those targeting federal spending and efficiency. Throughout early 2025, Musk's presence in the White House underscored his role as a pivotal advisor. He advocated for significant reductions in the federal workforce and proposed sweeping cuts to various government programs, reflecting his drive for efficiency. Notably, Musk's approach was often at odds with traditional governmental practices, as he was perceived to prioritize his business interests over standard political protocols. However, despite his considerable sway, tensions began to surface as Trump's administration took shape.

  • Musk's affiliation came under scrutiny particularly regarding conflicts of interest, especially considering that his companies like Tesla and SpaceX were heavily reliant on government contracts. Despite reassurances from Trump that conflicts would be managed, Musk’s role was often seen as controversial, raising questions about the appropriateness of a business mogul directly influencing government policies. In February 2025, he actively participated in numerous events, including Cabinet meetings, suggesting a deep integration into Trump's operating framework.

  • 2-2. Key events leading to the public feud

  • The seeds of discord between Musk and Trump began sprouting in early June 2025, driven largely by significant disagreements over fiscal policy. Musk publicly criticized Trump's massive spending bill, known colloquially as the "One Big Beautiful Bill, " calling it economically reckless. His tirades on social media culminated in accusations that Trump was involved with unsavory figures, leading to Trump expressing disbelief and frustration in his response. In a pivotal moment on June 5, tensions reached a boiling point: Musk lashed out on various platforms, suggesting that Trump's tax policies undermined efforts to reduce the federal deficit. Trump's retaliatory remarks indicated a swift shift from allyship to outright enmity, as he threatened to cut off financial support for Musk's ventures, labeling Musk's criticisms as betraying their previous alliance. These public exchanges marked the transformation from a relationship characterized by mutual support to one fraught with accusations and counter-accusations.

  • Moreover, additional fractures occurred as Trump's administration began sidelining Musk from key decision-making processes, which he perceived as diminishing his influence. The confirmation pull of Jared Isaacman, a key ally and Musk's choice for NASA administrator, further strained their relationship, suggesting a political snub that Musk could not overlook. This series of events ultimately paved the way for a dramatic disintegration of their partnership.

  • 2-3. Timeline of departure and fallout

  • The dramatic end to the Musk-Trump partnership unfolded in a series of tightly linked events beginning with Musk's resignation from DOGE on May 30, 2025. Initially, both Musk and Trump downplayed the potential impact of the separation, but Musk's immediate descent into critical assertions of Trump's policies fueled the flames of their rivalry. Within days, Musk accused Trump of fiscal irresponsibility and vowed to oppose any Republican lawmakers who supported the controversial spending bill. By June 5, the situation escalated as the public spat turned hostile, typifying their once amicable relationship's collapse. Trump's announcement that Musk was 'wearing thin' illustrated Trump's rising irritation at Musk's caustic remarks. Notably, the fallout extended beyond personal animosity; Tesla's stock plummeted by 14% amidst the chaos, and investor confidence waned significantly as uncertainty grew over Musk’s business future following Trump's veiled threats to revoke government contracts. As of June 7, 2025, the fallout seems deeply entrenched, with both figures asserting that their public persona had suffered due to the fallout. Musk, attempting to distance himself from Trump, mobilized his considerable online presence to underscore his previous contributions to Trump's campaign while simultaneously calling for accountability in the face of their disputes. The long-term implications of this rupture continue to be assessed, especially regarding the potential impacts on both Musk's enterprises and Trump's political capital.

3. Commercial Impact on Tesla: Stock, Sales, and Competition

  • 3-1. Tesla stock performance post-feud

  • Following the highly publicized fallout between Elon Musk and Donald Trump, Tesla's stock performance has shown noticeable volatility. On June 6, 2025, it was reported that Tesla's stock price had fallen by approximately 15% in 2025 prior to the feud, which subsequently triggered investor concerns during the unresolved conflict (as noted in the coverage of Musk's political activities). Throughout the preceding months, Musk’s controversial alignment with Trump contributed to significant brand erosion, especially among Tesla’s traditionally liberal consumer base. Analysts suggested that the fallout could lead to a perpetual decline unless proactive measures were taken to regain consumer trust and stabilize investor confidence.

  • Tesla's shares experienced fluctuations amid the political drama, falling roughly 12% during Musk's tenure as a special government employee in D.C. Many industry experts have voiced concerns regarding the long-term implications of this political engagement on Tesla's stock. By June 7, 2025, investors expressed cautious optimism with minor recoveries in share value following Musk's return to focus primarily on Tesla's core business. However, the broader sentiment remains skeptical, with some analysts expecting only a modest recovery in the near term.

  • 3-2. Profit and sales downturn

  • Tesla has faced significant challenges in maintaining profitability and sales momentum as of June 2025. Financial reports indicated a staggering 71% drop in Q1 profits for 2025, a trend that reflects deep-rooted issues in the company’s operational effectiveness. Following heightened political tensions, several key markets experienced dramatic decreases in sales. For instance, Tesla reported nearly a 50% decline in sales across over 30 European countries in April 2025. This downturn can be attributed to buyer hesitancy amid political backlash against Musk and the brand’s perceived politicization.

  • Additionally, the resale values of Tesla vehicles decreased by approximately 16% year-over-year, signaling waning consumer confidence. Analysts noted that the struggles faced by Tesla are compounded by a rising trend of consumer boycotts and dissatisfaction, which emerged as a direct result of Musk's entanglement with the Trump administration, effectively alienating a significant portion of its customer base.

  • 3-3. Rising competition from Chinese EV makers

  • As of early June 2025, competition from Chinese electric vehicle (EV) manufacturers has intensified, contributing further to Tesla's sales woes. Recent data from China’s Passenger Car Association revealed that Tesla's Shanghai factory output fell by 15% in May 2025 compared to the previous year. This decline marks the eighth consecutive month of reduced production, underscoring a regional trend that is detrimental to Tesla's overall market share.

  • Tesla's dominance in China has significantly diminished, with its share of the battery EV market reportedly falling by more than half in the last four years. Competitors such as BYD have captured substantial market share by offering advanced features and attractive pricing, positioning themselves as major disruptors to Tesla's previously unrivaled status. Furthermore, developments continue to unfold as startups enter the market armed with innovative models that appeal to consumers seeking high-tech features at competitive prices. The pressures from these rivals are a crucial factor that Musk must address promptly to maintain any semblance of market leadership within the rapidly evolving landscape of the global EV market.

4. SpaceX Under Strain: Contractual and Operational Risks

  • 4-1. Potential loss of NASA missions

  • The ongoing fallout from the recent feud between Elon Musk and Donald Trump poses significant risks to SpaceX's future, particularly regarding its obligations to NASA. As of June 2025, SpaceX finds itself in a precarious position following Trump's public statements indicating that he might terminate crucial government contracts with Musk's companies due to their escalating political conflict. This includes potentially vital contracts related to NASA's manned missions, which rely heavily on SpaceX's Dragon spacecraft to transport astronauts to and from the International Space Station (ISS).

  • Historically, SpaceX has been integral to U.S. human spaceflight since the end of the Space Shuttle program. The Dragon spacecraft represents the sole U.S.-based vehicle capable of such flights. If Trump proceeds with his threats, NASA could quickly lose its capability to launch crewed missions from American soil, creating a substantial void that would force the agency to turn to international partners like Russia for astronaut transportation—an undesirable and politically sensitive situation. Furthermore, the ongoing tensions come amidst significant uncertainties regarding the continuity of the ISS program, which is slated for decommissioning by 2030. Any delays or disruptions to SpaceX's role could have long-lasting implications for U.S. space ambitions.

  • 4-2. Threats to Starlink contracts

  • Musk's other major venture, Starlink, which aims to provide global broadband service via a network of satellites, is also facing pressure due to the renewed political tensions. Under Trump’s administration, Starlink had successfully secured several international contracts and licenses, including significant partnerships in countries like India and Saudi Arabia. However, with the current political tensions between Trump and Musk, the prospect for future contracts may have weakened.

  • Starlink's continued success largely relies on favorable government policies and international relations, making it vulnerable to the whims of political leaders. Should Trump's administration indeed cut back on support for projects associated with Musk, it could hinder Starlink's ongoing expansion efforts and provoke existing international partners to reconsider their agreements, leading to stalled growth for the service. This potential instability could affect the company’s financial health and its ability to meet ambitious deployment targets.

  • 4-3. Implications of political rift for government deals

  • The political rift emerging from Musk and Trump’s fallout underscores the vulnerability of Musk's businesses, which have become increasingly dependent on government contracts. As of early June 2025, Musk's companies, particularly Tesla and SpaceX, are entwined in a web of federal contracts that are critical for their operational success and growth trajectories.

  • Analysts indicate that, given Musk's high-profile conflict with Trump, there is an increasing risk that key government contracts could be jeopardized. For instance, despite SpaceX being the primary provider of launch services for various Department of Defense missions, any backlash from Trump's administration could see the company losing critical contracts that are essential for national security projects, including satellite launches that support U.S. military operations. Additionally, any budgetary cuts from the White House could severely constrain NASA's financial resources, further impacting SpaceX’s contractual engagements and operational sustainability. These developments create an atmosphere of uncertainty, complicating SpaceX's ability to plan for its future initiatives and revenue streams.

5. Organizational and Workforce Concerns at DOGE

  • 5-1. DOGE staff anxieties over political retribution

  • Following the tumultuous fallout of the Trump-Musk relationship, staff members at the Department of Government Efficiency (DOGE) have expressed significant concerns regarding their job security and potential political backlash. Many employees are apprehensive that the rift between Musk and Trump could put them at risk for political retribution, especially as they remain embedded in various federal agencies. The fear is compounded by the very public nature of the feud, including threats made by Trump concerning investigations into the government initiatives that DOGE has been associated with. This ongoing anxiety among staffers reflects a deep-seated worry not only about their immediate future but also about their long-term career prospects, with some even considering exits from federal roles in search of more stable opportunities.

  • Various sources within DOGE have highlighted discussions among employees about the potential ramifications of their association with Musk’s initiatives. They believe that should Trump's administration choose to pursue investigations or take punitive actions against DOGE, those who worked there might find it challenging to secure future employment, as they could be viewed as politically tainted. The departure of key figures from DOGE, such as Musk and his operational lead, Steve Davis, has left a palpable change in internal dynamics. Many current employees are facing uncertainty, as they are left to navigate their roles with less support and guidance than before.

  • 5-2. Internal dynamics post-feud

  • In the wake of the high-profile feud, the internal dynamics at DOGE have undeniably shifted. With Musk’s exit from the administration, the organizational structure now requires staff to report directly to the patient leadership of the President’s cabinet rather than to any specific directive from Musk. There is widespread acknowledgment among DOGE personnel that the success of their initiatives may depend heavily on how the new leadership adapts to the absence of Musk’s vision and influence.

  • Despite these challenges, some DOGE staff members express hope as major tech companies have begun to show interest in hiring former DOGE employees. Notably, companies like Coinbase have created dedicated hiring portals to attract talent from this organization. This potential for external employment opportunities offers a glimmer of optimism to those navigating turbulent times within DOGE. As the ongoing situation develops, DOGE's mission of enhancing government efficiency remains officially supported by the administration, though employees remain cautious about its long-term viability amidst external scrutiny and internal uncertainties.

6. Musk’s Strategic Refocus and Future Outlook

  • 6-1. Return to Tesla, SpaceX, and AI priorities

  • In early June 2025, following a tumultuous relationship with Donald Trump that affected his companies significantly, Elon Musk has expressed a renewed focus on returning to his core operations with Tesla, SpaceX, and advancing artificial intelligence initiatives. After stepping back from the political limelight, Musk is reportedly committed to spending '24/7' in his factories and offices, aiming to restore not just productivity but also the morale of his teams. This shift comes as Tesla and SpaceX both grapple with the impacts of Musk's recent political affiliations, which alienated many customers and stakeholders. Insiders have noted that Musk's engagement is crucial for both companies, particularly in revitalizing Tesla's struggling sales and strengthening SpaceX's operational footing.

  • The political fallout from Musk’s earlier support of Trump had severely impacted Tesla, which saw a notable decline in its brand trust and customer base, particularly among liberal consumers. Analysts and insiders are eager to see if his strategy to re-engage with operational challenges will salvage Tesla’s identity as a pioneering electric vehicle manufacturer and restore public confidence.

  • SpaceX, likewise, is expected to benefit from Musk's renewed focus. Musk's physical presence has been sorely missed during critical phases of its operations, such as the Starship project. With Musk's commitment to returning to daily management, there's an optimistic atmosphere that SpaceX might regain its former momentum, especially in its ambitions for deep space missions.

  • 6-2. Planned robotaxi rollout

  • Elon Musk's plans for a robotaxi service are on the brink of realization, with Tesla eyeing a launch in Austin, Texas, by June 2025. This project is deemed pivotal for Tesla’s future as it aspires to establish itself as a leader in the autonomous vehicle sector. The robotaxi initiative is set to capitalize on advancements in Tesla's self-driving technology, a critical revenue stream that Musk believes could constitute a substantial portion of Tesla's long-term value.

  • As anticipation builds, experts like Dan Ives from Wedbush Securities regard this rollout as a 'watershed moment' for Tesla. Success hinges on delivering reliable, supervised autonomy, as past delays and ongoing concerns about safety protocols have raised skepticism among consumers and investors alike. The effectiveness of this launch will be a key determinant of Tesla's recovery and will significantly influence stock performance moving forward.

  • 6-3. Long-term business recovery strategies

  • Musk's recent commitment to revitalizing Tesla and SpaceX includes a strategic focus on long-term recovery plans tailored to rebuild investor and consumer confidence. The strategy encompasses refreshing Tesla's vehicle lineup and severely enhancing sales and marketing efforts to combat the erosion of brand loyalty impacted by his political ties. Furthermore, the company recognizes the urgency in countering the looming threat posed by competitors, particularly from rapidly growing Chinese electric vehicle manufacturers like BYD.

  • For SpaceX, long-term strategies also emphasize technological advancements and securing necessary government contracts that are fundamental for its operational success. The company aims to stabilize its reputation while executing its ambitious plans to participate meaningfully in international aerospace developments, despite facing setbacks related to recent test failures. Through innovation and consistent engagement with regulatory bodies, Musk hopes to reaffirm SpaceX's pivotal role in national and global space exploration.

  • Overall, as of June 2025, these strategic shifts mark a decisive turn for Musk, indicating a strategic pivot back to his expertise and prioritizing business over political engagements. The outcome will sculpt the future trajectory of both Tesla and SpaceX, positioning them for potential recovery and innovation.

Conclusion

  • The fallout between Trump and Musk poses critical lessons regarding the integration of politics and business, illustrating the vulnerabilities that emerge when corporate leaders entangle themselves in political arenas. As of early June 2025, Tesla's ongoing stock slump and profitability challenges have been exacerbated by Musk’s political engagements, revealing the risks of alienating key consumer demographics and inciting investor trepidation in a highly competitive landscape, particularly as competition from Chinese electric vehicle manufacturers escalates.

  • Simultaneously, SpaceX faces operational uncertainties that stem from the potential revocation of vital contracts tied to NASA and defense initiatives. Amidst these challenges, the staff at DOGE have expressed fears concerning job security and political repercussions, emphasizing the human costs inherent within high-stakes affiliations. Yet, as Musk pivots back to his foundational business endeavors, his commitment to advancing core technologies in electric vehicles, aerospace, and artificial intelligence presents a roadmap for potential recovery.

  • Looking ahead, the success of these strategic shifts will rely heavily on Musk’s ability to stabilize investor sentiment and reclaim lost market share. The forthcoming robotaxi launch and the quest for competitive differentiation amidst global rivals will be pivotal in redefining Tesla's brand image. Furthermore, ensuring the continuity of government contracts for SpaceX will be essential in maintaining its position as a leader in both commercial and government aerospace sectors. Ultimately, Musk's return to innovation and operational focus may reshape the trajectory for both Tesla and SpaceX, steering them toward a future characterized by resilience and growth.

Glossary

  • DOGE (Department of Government Efficiency): A federal agency established to streamline government operations and increase efficiency. As of June 2025, its staff are facing job security concerns following the public fallout between Elon Musk and Donald Trump, which has also raised fears of potential political retribution and scrutiny.
  • robotaxi: An autonomous vehicle service set to launch in Austin, Texas, by June 2025, aimed at establishing Tesla as a leader in the self-driving technology sector. Its success is crucial for Tesla's long-term value and recovery following Musk's recent political controversies.
  • stock slump: A significant drop in Tesla's stock value, which fell by approximately 14% due to the fallout from Musk's political entanglement with Trump. As of early June 2025, analysts express cautious optimism about minor recoveries but remain skeptical about Tesla's ability to regain its previous market strength.
  • NASA (National Aeronautics and Space Administration): The U.S. government agency responsible for the nation's civilian space program and for aeronautics and aerospace research. SpaceX is heavily reliant on NASA contracts for its operations, and the recent feud with Trump poses risks to these key agreements.
  • Chinese EV makers: Electric vehicle manufacturers from China, such as BYD, that have increasingly dominated the market, posing significant competition to Tesla. The rise of these companies has affected Tesla's sales and market share, especially in key regions like China, as of June 2025.
  • special government employee: A designation Musk held within Trump’s administration, allowing him to engage in government policy discussions while maintaining his business operations. His role raised questions regarding conflicts of interest, particularly concerning government contracts for Tesla and SpaceX.
  • artificial intelligence (AI): A key focus area for Musk's companies, emphasizing innovations in software and autonomous systems. Following the Musk-Trump feud, there is a renewed commitment to advancing AI technologies within Tesla and SpaceX as part of long-term recovery strategies.
  • competing brands: As of early June 2025, Tesla faces increasing competition from other automotive brands, especially in the electric vehicle sector. The competition, particularly from foreign companies like those in China, is affecting Tesla's market positioning and sales.
  • fiscal irresponsibility: A term used by Musk to describe Trump's massive spending bill, which led to public disagreements between the two. The argument signifies a significant ideological split, marking the decline of Musk's political influence and leading to a substantial public feud.
  • Starlink: A satellite internet constellation project developed by Musk's SpaceX, aiming to provide global broadband service. The political tensions resulting from the feud with Trump jeopardize contracts and partnerships essential for Starlink’s growth and expansion efforts.

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