Introduction

In the dynamic world of business and politics, few relationships have captured as much attention as that between visionary entrepreneur Elon Musk and President Donald Trump. Their interactions have sent ripples through various sectors, particularly impacting the companies associated with Musk. 

This blog post will delve into the intertwined fates of Elon Musk and Donald Trump, examining their common goals, the timeline of their relationship, the repercussions on Tesla’s stock, and the potential future implications for Musk’s ventures.

Elon Musk: A Visionary’s Empire and Ambitions

Elon Musk is a name synonymous with ambitious innovation and disruptive technologies. He stands at the helm of several groundbreaking companies, each with audacious goals that aim to reshape humanity’s future.

Tesla: Tesla’s mission is to accelerate the world’s transition to sustainable energy through electric vehicles, solar energy systems, and battery storage. The company aims to make its vehicles enjoyable and its factories carbon-neutral, driving the global shift towards electric vehicles. Musk believed so strongly in this goal that at one point he opened Tesla’s patents so other companies could better develop their own EV technologies.

SpaceX: SpaceX was founded to revolutionise space technology, with the ultimate goal of enabling human life on other planets, particularly Mars. This involves significantly reducing space access costs and improving reliability, developing Starlink, and transporting humans and their cargoes to the Moon and Mars.

X (formerly Twitter): Musk’s purchase of Twitter, renamed X under his ownership, has been fraught with controversy, but Musk himself claims the platform still aims to promote and protect public conversation, serving as the internet’s global town square. It had been a major political stage and became a critical platform during the 2024 Trump-Harris campaign.

Musk’s common goals often extend beyond individual company objectives, encompassing broader societal impacts such as reducing government spending and advancing technologies like self-driving cars and sustainable energy solutions. His vision frequently involves pushing the boundaries of what is currently possible, often with a focus on long-term human progress.

The Shifting Sands: A Timeline of Musk and Trump’s Relationship

The relationship between Elon Musk and Donald Trump has been a rollercoaster of alliances and disagreements, often reflecting the unpredictable nature of both personalities. Here’s a timeline of their evolving interactions:

  • July, 2024: Elon Musk formally endorsed Donald Trump for the 2024 US Presidential election, stating “I fully endorse President Trump and hope for his rapid recovery” after Trump’s attempted assassination during a campaign rally.
  • August-October 2024: Musk held a conversation with Trump on X. He also funneled millions into supporting Trump’s campaign.
  • November 2024: Elon Musk mounted a full-court press for Donald Trump, deploying his platform X to get out the vote for Trump just before Election Day, and shortly after the vote tally was finalised, President-elect Donald Trump tapped Elon Musk to head the “Department of Government Efficiency” (DOGE) with a mission to slash federal spending.
  • February, 2025: Trump further empowered DOGE by signing an executive order designed to expand its authority in governmental cost-cutting initiatives. Musk takes considerable criticism from the left for slashing so many federal programs so severely.
  • May, 2025: A significant turning point occurred when Musk publicly criticised Trump’s proposed “Big Beautiful Bill.” Musk asserted that the bill would “destroy millions of jobs in America and cause immense strategic harm to our country,” and that it would undermine the very mission of DOGE, the department he was appointed to lead. Weeks later Musk steps back from DOGE.
  • June, 2025: The feud escalated dramatically. Trump publicly threatened to cut off government contracts with Musk’s companies, a significant threat given SpaceX’s reliance on such contracts. In response, Musk controversially claimed that Trump would not have won the 2024 election without his support. Trump retaliated further by threatening to have DOGE investigate Musk’s companies for subsidies.
  • June, 2025: Media outlets widely reported the implosion of what was once described as a “bromance” between Trump and Musk. The rapid deterioration of their relationship, which had flourished during the election season, was attributed to their bitter disagreement over the “Big Beautiful Bill”.
  • July, 2025: The tensions continued, with Trump threatening to cut off billions of dollars in subsidies to Elon Musk’s companies, further highlighting the potential financial repercussions of their falling out. Trump expected to sign the Big Beautiful Bill into law, further increasing the government deficit. And of course Musk has announced plans for a third party, a frequent but ill-fated attempt in American politics. 

Tesla’s Rollercoaster Ride: Stock Performance and Market Challenges

The volatile relationship between Musk and Trump has not been without its impact on Tesla, a company often seen as an extension of Musk’s public persona. Investors have witnessed significant fluctuations in Tesla’s stock performance, alongside growing market challenges.

Stock Performance:

Following the 2024 election, Tesla’s stock experienced a period of dramatic swings. Initially, the stock surged, reaching an all-time high of $479 after Trump’s re-election. This initial optimism may have been fueled by expectations of a business-friendly administration or perhaps a perceived alignment of interests between Musk and the new government. Or maybe simply a belief that with Musk so close to Trump, and Tesla being a kind of reflection of Musk himself, that the company would do well. However, this upward trajectory was not sustained.

The announcement of tariffs by the Trump administration introduced further volatility. While some reports of potential tariff exemptions initially led to a 10% surge in Tesla shares, the broader imposition of 25% tariffs on imported cars and parts created a complex scenario. Despite an initial rise, the stock later plunged by 14% when Elon Musk publicly warned that these tariffs could trigger a US recession. This highlights how political decisions, especially those involving trade, can directly and swiftly impact investor confidence and stock valuations.

Interestingly, Musk has claimed that the rollback of EV tax credits would actually be beneficial to Tesla, by eliminating some of the competition who could not afford to sell their EVs without the rebate. Moreover, Tesla is regarded as one of the best positioned for a “Make in America” trend, though many of its components are still produced across the vast global supply chains of the modern economy.

Sales in Europe:

Beyond stock market reactions, Tesla has faced tangible business challenges, particularly in the European market. Recent data indicates a significant downturn in sales multiple months in a row. In many EV-friendly countries, like Germany, Sweden, and France, sales plummeted by a double-digit percentages, even surpassing 50%. In April 2025, overall sales tumbled by 49% in April 2025 compared to the previous year. Some observers initially tried to link this to the delay in the launch of a new model, but by July 2025 it was clear there was a bigger trend at play. 

The current theory is that two main reasons are pushing this plunge: a backlash against Musk’s political controversies, especially his support of far-right German party AfD, as well as increasing competition in the European EV market.

Competition from China:

The competitive landscape, especially from China, poses a significant threat to Tesla’s dominance. Chinese electric vehicle (EV) manufacturers, such as BYD, are rapidly gaining ground, particularly in areas where Tesla has historically held an advantage. These Chinese competitors are challenging Tesla in self-driving technology by offering advanced systems for free, a stark contrast to Tesla’s nearly $9,000 charge for its Full Self-Driving (FSD) feature. 

Furthermore, BYD has surpassed Tesla in global annual sales, and Chinese suppliers are introducing revolutionary battery technologies. The EV price wars in China have driven these automakers not only to extreme cost-cutting but also to pursuing more lucrative overseas markets. This intense competition from China, coupled with the European sales slump, presents a formidable challenge to Tesla’s future growth and market share.

The Road Ahead: Future Implications for Musk’s Ventures

The recent fallout between Elon Musk and Donald Trump raises critical questions about the future trajectory of Musk’s business empire. The implications extend beyond Tesla, potentially affecting SpaceX and his personal involvement in his companies.

Will Musk return full-time to business?

Elon Musk’s foray into the political arena, particularly his advisory role within the Trump administration and subsequent public disagreements, has undoubtedly diverted his attention from the day-to-day operations of his companies. His public statements and political engagements have often been controversial, leading to speculation about his focus. The question remains whether this recent political turbulence will prompt him to fully disengage from politics and return his undivided attention to his business ventures, or if his political interests will continue to influence his time and priorities.

Will his falling out with Trump impact SpaceX’s government contracts?

SpaceX holds substantial government contracts with entities like NASA and the US military, which are crucial to its valuation and ongoing operations. The public threats from Trump to cut off these contracts are a serious concern. While the US government heavily relies on SpaceX for various space missions, including launching satellites and human spaceflight, the political will to maintain these contracts could be tested. 

The Department of Defense (DOD) and NASA have reportedly been ordered to audit Musk’s contracts, indicating a potential review. The impact of such a review, or any actual cancellation of contracts, could significantly hinder SpaceX’s growth and its ambitious goals, including Mars colonisation. However, given SpaceX’s critical role in national space endeavors, a complete severing of ties might be challenging for the government to implement without significant disruption to its own programs.

This is doubly true with the failure of Boeing’s Starliner to bring back astronauts from the ISS (and SpaceX’s successful rescue mission), and the seeming irrelevance of Jeff Bezos’ competitor Blue Origin in the public psyche.

Will Tesla be able to beat Chinese competition or SpaceX in the spacetech arena?

The intensifying competition from Chinese EV manufacturers, particularly in self-driving and battery technology, presents a formidable challenge for Tesla. Chinese companies are not only offering advanced self-driving features for free but are also innovating rapidly in battery technology. Tesla’s ability to maintain its competitive edge will depend on its capacity to innovate at an even faster pace, reduce costs, and adapt to evolving market demands. The outcome of this technological race will be crucial for Tesla’s long-term success and its position as a leader in the global EV market. 

However, with the Trump administration’s apparent vendetta against EVs and green technology, Tesla – and the entire US-based ecosystem – may suffer from a lack of innovation networks. And Musk’s empire, with Tesla as its financial proxy, is likely to face competition in the spacetech industry, as Chinese and other countries’ companies reach for the stars too.

The US market and its potential for Tesla

While Tesla may be losing ground in Europe, its largest market is still the United States. The question remains whether Musk’s politics have alienated his key customer base, who tend to lean to the left, and whether reputational damage to Tesla will dampen sales long-term. On the other hand, the intense competition from China is unlikely to repeat in the United States, where the Biden administration effectively locked out Chinese EVs through an order to bar any Chinese software in “critical systems” of vehicles. That said, there are still plenty of competitors from Europe, Japan, and Korea, who are affected to varying degrees by import tariffs, and Tesla is, at least for now, artificially protected from global competition in its largest market.

Conclusion

The relationship between Elon Musk and Donald Trump, marked by periods of alignment and intense conflict, has undeniably influenced the business landscape for Musk and his companies. As the future unfolds, the interplay between Musk’s visionary ambitions, the political climate, and the relentless pace of global competition will continue to shape the fortunes of his empire. Investors will need to closely monitor these complex interactions to make informed decisions in an increasingly interconnected world.

For real-time sentiment analysis and tracking, and the latest news from more than 10,000 financial and business sources in 50+ languages, CityFALCON offers dedicated monitoring pages:

Tesla: https://www.cityfalcon.ai/news/directory/stocks/tesla-tsla/news 

Spacex: https://www.cityfalcon.ai/news/directory/private-companies/spacex/news 

Elon Musk: https://www.cityfalcon.ai/news/directory/people/elon-musk/news 

Donald Trump: https://www.cityfalcon.ai/news/directory/people/donald-trump/news 

These pages not only follow news and sentiment, but on Tesla’s we also show insider transactions, ownership structure, filings, and much more. Of course not only on Tesla but any public company with this data available, making your investment and portfolio monitoring easier and better.