Washington: The once-friendly relationship between former U.S. President Donald Trump and billionaire entrepreneur Elon Musk dramatically unraveled Thursday, as Trump threatened to terminate government contracts to Musk’s companies while Musk openly endorsed calls for Trump’s impeachment. The sharp public exchanges between the two high-profile figures have left observers questioning the future of this unlikely alliance.
Tensions escalated after Trump criticized Musk in the Oval Office and the pair traded barbs on their respective social media platforms—Trump on Truth Social and Musk on X (formerly Twitter). Trump posted, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.”
The market reacted swiftly: Tesla shares plunged over 14%, wiping out approximately $150 billion in market value—marking the largest one-day loss in the company’s history.
Minutes after the market close, Musk fueled the fire by responding with a simple “Yes” to a post on X calling for Trump’s impeachment—an unprecedented stance given the Republican majority in Congress.
The friction dates back several days, triggered by Musk’s outspoken criticism of Trump’s sweeping tax-cut and spending legislation. Musk argued the bill would dangerously increase the nation’s $36.2 trillion debt. Trump initially stayed silent but broke his silence Thursday, telling reporters, “Look, Elon and I had a great relationship. I don’t know if we will anymore.”
Responding in real time on X, Musk countered, “Without me, Trump would have lost the election,” referencing his nearly $300 million political spending supporting Trump and other Republican candidates during last year’s elections. Musk also warned that Trump’s tariffs could push the U.S. into a recession later this year.
Musk’s influence extends beyond Tesla into space technology through SpaceX and its satellite network Starlink, both heavily engaged with government contracts. Musk threatened to begin decommissioning SpaceX’s Dragon spacecraft—the only U.S. vehicle capable of transporting astronauts to the International Space Station—citing Trump’s threats as the reason. However, Musk later softened this stance, backing away from the decommissioning threat.
In a sign of possible reconciliation, Musk responded to billionaire investor Bill Ackman’s suggestion that the two should reconcile with the words, “You’re not wrong.”
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Punching Back
Both Trump and Musk are known for their combative use of social media to wage political battles, and many anticipated a fallout. Musk once served as an influential adviser to Trump’s Department of Government Efficiency, overseeing efforts to reduce federal spending and workforce size.
Since leaving the role, Musk has become a vocal critic of Trump’s so-called “big, beautiful bill”, calling it a “disgusting abomination” that would further inflate the federal deficit. Musk’s stance has deepened divisions within the Republican Party, potentially jeopardizing the bill’s chances in the Senate.
Nonpartisan analysts estimate the bill could add between $2.4 trillion and $5 trillion to the national debt.
The ongoing feud raises concerns about its impact on the Republican Party’s ability to retain control of Congress in next year’s midterm elections, particularly if Musk pulls back his financial support or Silicon Valley’s backing for Trump diminishes.
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A Republican strategist close to Musk and the Trump administration told Reuters, “Elon really was a significant portion of the ground game this last cycle. If he sits out the midterms, that worries me.”
On Tuesday, Musk posted, “in November next year, we fire all politicians who betrayed the American people.”
Despite Musk’s past political investments, he has indicated plans to reduce his political spending going forward. His growing political involvement has already sparked protests at Tesla facilities and concerns among investors about divided leadership focus impacting sales.
