What’s at stake for world’s richest man – DW – 06/06/2025 | EUROtoday

How did Musk and Trump get so shut?

Once a vocal critic of Donald Trump throughout his 2016 United States election marketing campaign, Elon Musk, the billionaire CEO of Tesla and SpaceX, pivoted from his Democratic Party roots to embrace Trump’s insurance policies in the course of the Republican’s second time period.

Frustrated by Obama-era rules stifling his ventures, Musk embraced Trump’s agenda of tax cuts and deregulation.

Their bond grew from mutual respect to a strong political alliance, which noticed Musk final yr again Trump’s reelection marketing campaign to the tune of practically $300 billion (€263 billion).

When Trump returned to the White House in January, the world’s richest man took on an advisory position within the administration, main the controversial Department of Government Efficiency (DOGE).

Tasked with slashing public spending, Musk’s position stirred controversy, impacting Tesla’s inventory value and auto gross sales. After months of stress from buyers, Musk agreed final month to scale again his work in Trump’s authorities.

What sparked the general public feud between Trump and Musk?

On Thursday, sporting a T-shirt emblazoned with the “The Dogefather,” Musk was given an initially cordial farewell by the president within the Oval Office.

But Trump couldn’t include his frustration at Musk’s earlier criticism of his administration’s sweeping tax and spending invoice, which the Tesla founder referred to as fiscally reckless and a “disgusting abomination.”

After Musk then accused the US president of alleged ties to youngster intercourse offender Jeffrey Epstein, the information convention ended with Trump threatening to revoke Musk’s authorities contracts, which may price his enterprise empire billions of {dollars}.

Over the following few hours, the row spilled over to social media, the place each males repeated their White House remarks, prompting the SpaceX proprietor to announce a direct decommissioning of its Dragon spacecraft, earlier than showing to again down.

How did markets react to the Trump-Musk fallout?

Tesla inventory misplaced about $150 billion in market worth on Thursday — the most important single-day decline in its historical past. The inventory closed down over 14%.

However, information outlet Politico reported Friday that the 2 males have been scheduled to talk later within the day within the hope of defusing the scenario, which brought about a pointy reversal within the inventory’s fortunes. Tesla inventory was up 5% in pre-market commerce.

However, a White House official mentioned later Friday that Trump had no plans for any name with Musk.

Tesla shares have been on a wild rollercoaster trip this yr after a robust efficiency across the US election. Having peaked at $428 in January, shares within the electrical vehiclemaker plummeted by nearly half in March as buyers reacted negatively to Musk’s involvement within the Trump administration.

Tesla inventory then rallied when Trump paused his unprecedented tariffs on the remainder of the world and after US regulators eased guidelines on self-driving automobiles.

What’s at stake for Musk’s empire?

The public spat, in addition to Trump’s price range plans, have left the fortunes of Musk’s corporations hanging within the steadiness.

Tesla, Musk’s most worthwhile agency, may very well be severely impacted by Trump’s plans to chop a subsidy on new electrical automobiles that’s value as much as $7,500 for consumers.

Despite Musk’s aggressive criticism and lobbying by Tesla, Trump plans to get rid of the credit score by the top of the yr, seven years earlier than it was because of expire.

News company Bloomberg cited JP Morgan analysts as saying that the minimize would scale back Tesla’s full-year revenue by $1.2 billion. Cuts to state-level credit may additional impression the EV maker’s backside line this monetary yr.

It may, nevertheless, encourage EV consumers to deliver ahead their plans and spur demand for Tesla’s automobiles within the quick time period.

Tesla is already being impacted by Trump’s tariffs because the agency depends on Chinese components for its Cybercab robotaxi and Semi electrical truck.

However, it’s unclear whether or not Trump can unilaterally make good on his menace to tear up federal contracts with Musk’s companies like SpaceX.

Since 2000, SpaceX has acquired greater than $22 billion in contracts from the US Defense Department and area company NASA.

If Trump have been to terminate the contracts, it could have an enormous monetary impression on SpaceX and disrupt the US authorities’s area ambitions.

SpaceX’s Crew Dragon is at present the one US spacecraft licensed to hold crew to the International Space Station (ISS).

Any ending of Pentagon contracts involving Musk’s Starlink satellite tv for pc web service would even be a lose-lose for each Musk and the federal government.

Starlink offers broadband companies to rural areas. Terminals are additionally deployed on US navy bases, ships, plane, and armored automobiles. The satellite tv for pc web service is commonly used for catastrophe response.

Edited by: Uwe Hessler