The escalating feud between Elon Musk and Donald Trump poses significant risks for Musk’s businesses, potentially costing him billions. The conflict could disrupt Tesla’s plans for autonomous vehicles, limit SpaceX’s contracts with NASA, decrease international contracts for Starlink, and cause a loss of advertisers on the social media platform X.
As tensions rise, analysts express concern over Musk’s vulnerability due to his businesses’ heavy reliance on government contracts. The timing of the dispute coincides with Tesla’s critical upcoming trial for driverless taxis in Texas, a venture that Musk hopes will revive sluggish sales in various markets. However, with Trump hinting at punitive measures against Musk’s companies, including SpaceX, there’s a chance that federal safety regulators might intervene if any issues arise.
Previously, the National Highway Transportation Safety Administration (NHTSA) had already sought performance data for Tesla’s autonomous taxis amidst ongoing scrutiny from multiple investigations, including one connected to fatal accidents involving Teslas. Amid this conflict, Tesla’s stock has seen volatility, reflecting investor anxiety as it lost about 14% in value, although it managed a slight recovery shortly after.
Moreover, regulatory changes initiated by Republican lawmakers threatening to drop penalties for gas-powered vehicles could significantly impact Tesla’s carbon credit sales, a hidden yet vital revenue stream. With Musk’s political affiliations potentially alienating environmentally conscious consumers, sales figures for these credits surged earlier in the year, highlighting their importance to Tesla’s financial health.
The dynamics of this feud not only affect Musk but also pose challenges for the US government, which relies on SpaceX for critical operations, such as ferrying astronauts to the International Space Station. Musk has made comments suggesting he could withdraw SpaceX’s Dragon spacecraft from service, though it remains to be seen how serious these claims are.
Elsewhere, Musk’s contentious relationship with Trump may also create hurdles for advertisers on X. Many brands, which initially left due to Musk’s approach to managing the platform, have begun to return, but the political climate remains precarious. Analysts warn that Trump could turn his attention against X, which could deter major advertisers once more.
As the conflict unfolds, the uncertainty surrounding the implications for both Musk and the broader business environment continues to rise. Strategies shaping the business landscape could change dramatically depending on how the dispute progresses, with industry experts noting the potential for lasting impacts on Tesla’s market position. With Musk’s past political manoeuvres potentially costing him sales, the outcome of this battle remains uncertain.