Elon Musk’s fiery split with Donald Trump has triggered a political and financial meltdown, erasing $380 billion in Tesla’s value and imperiling his government-dependent empire.
At a Glance
- Tesla’s market capitalization plummeted by $380 billion following Musk’s public feud with President Trump
- Trump retaliated against Musk’s criticism by threatening to terminate federal contracts with Tesla and SpaceX
- Musk accused Trump of being linked to Jeffrey Epstein, intensifying the public fallout
- The dispute has caused divisions among Silicon Valley elites and conservative influencers
- Musk’s history of contentious separations includes high-profile breakups with OpenAI and PayPal
Political Fallout
The rift between Elon Musk and Donald Trump erupted after Musk blasted Trump’s proposed tax-and-spending bill as a “disgusting abomination.” Trump fired back by threatening to cancel federal contracts for Tesla and SpaceX—an escalation that sent Tesla’s stock into a tailspin.
Musk intensified the feud by alleging Trump is implicated in unreleased Jeffrey Epstein files, adding a sensational twist that fueled a broader media frenzy. While both men are known for their combative style, the personal nature of this exchange has shocked even seasoned political analysts.
The fallout is already affecting Musk’s network. Prominent venture capitalists and tech allies are distancing themselves, wary of becoming collateral in the intensifying conflict.
Watch a report: What the Trump-Musk breakup may mean for SpaceX and Tesla.
Financial Implications
Tesla’s market cap has shed a staggering $380 billion, ranking among the largest valuation crashes of 2025. The threat to sever federal ties has investors fearing a collapse of the government-subsidized foundation that underpins much of Musk’s business empire.
Indeed, Musk’s firms have collectively benefited from at least $38 billion in government support, including energy credits, defense contracts, and space exploration funding. If these contracts are revoked, the consequences for SpaceX and Tesla could be existential.
Rival players are circling. Chinese electric vehicle makers and Jeff Bezos’ Blue Origin could gain ground, both competitively and politically, by presenting themselves as more stable alternatives for U.S. government collaboration.
Pattern of Contentious Breakups
This latest public feud fits a broader pattern in Musk’s career. His 2018 split from OpenAI over governance and strategic direction ended in acrimony and ongoing legal skirmishes. Musk then launched xAI, which some viewed as a direct provocation.
Before that, he was ousted from PayPal in a boardroom shakeup and clashed with co-founders at Zip2 during its acquisition. These incidents illustrate a longstanding pattern of turbulent exits that has defined Musk’s leadership style.
As the drama with Trump unfolds, observers are watching to see whether Musk’s polarizing tactics will bring ruin or resilience to his sprawling empire. The stakes have never been higher.
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Author: Editor
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