Tesla and xAI now tangled in political fire

Elon Musk and Donald Trump just blew up one of the loudest bromances in American politics, and now the real question is: who’s about to bleed the most? The clash lit a fire under both of their empires.

Trump’s presidency now hangs on a bill that could collapse if even three Republicans flip. Musk’s billions in government contracts are suddenly dangling over a cliff.

Trump made the first move Thursday when he threatened to cancel every government contract tied to Elon’s businesses. That hit would destroy a good chunk of Elon’s portfolio.

SpaceX, which works with the Pentagon, NASA, and intelligence agencies, would be gutted. It’s the main ride for astronauts to the International Space Station. It handles national security launches.

NASA even gave it nearly $5 billion in crew contracts and another $4 billion to build a vehicle for moon missions. There’s also an $843 million deal for SpaceX to take down the station in 2030. Add in the $1.8 billion classified contract with the National Reconnaissance Office, and you’re looking at a network of deals worth tens of billions.

And Elon wanted more. He was lining up for a shot at Trump’s missile-defense program, Golden Dome for America. That door’s closing. One official said Elon won’t be finding many allies left in Trump’s White House.

After Elon trashed the president’s legislative bill this week, Republicans around Trump started floating the idea of cutting him out altogether. Trump made it official himself on Thursday.

Tesla and xAI now tangled in political fire

Tesla got smacked hard the same day—its market value dropped by $152.4 billion. That’s the largest one-day loss the company’s ever taken. Elon blamed the drop on the war over federal support and regulatory problems.

He’s been pushing the government for changes to allow nationwide self-driving cars. Right now, individual states make those calls, and that’s been blocking his rollout plans.

In April, Transportation Secretary Sean Duffy visited Elon in Austin. They shot a video together from the Tesla factory. “We’re here in Austin, Texas, at the Tesla factory with Elon Musk, the great,” Sean said on X.

Elon replied, “Obviously, it would be wonderful for the United States to have a national set of rules for autonomous driving.” Tesla plans to launch its first self-driving taxi service in Austin later this month.

But the pressure isn’t just coming from self-driving rules. Tesla’s profits from emissions credit sales—worth hundreds of millions every quarter—are also in danger.

Last month, Congress killed California’s power to set its own tailpipe emissions rules. That was one of the strongest drivers of EV investment in the U.S. If federal fuel and emissions rules also get watered down, that income dries up fast.

Sales are already tanking. Tesla’s numbers in the U.S. and Europe have been falling for months. The timing lines up with Elon’s growing public closeness to Trump. Now that the alliance is dead, Tesla’s collapse may just be getting started.

Trump’s entire bill now depends on a few shaky votes

While Elon’s companies burn, Trump is running out of political breathing room. His mega-bill—a mix of tax cuts, border money, and slashes to Medicaid and food stamps—barely passed the House. The vote was 215–214. If just three Republicans flip, the bill goes down. And Elon’s trying to make that happen.

He called the bill a “disgusting abomination” and claimed it would pile $2.5 trillion onto the national deficit. Then he went further. “Such ingratitude,” Elon posted on X, saying Trump would have lost the 2024 election without his money. Elon gave more than $250 million to Trump’s re-election effort and made it clear he’s not done spending—only this time, it could be against Trump.

Rep. David Schweikert of Arizona, who missed the first vote, said Thursday that he wants “multiple changes” before he’ll support the bill. “Musk is absolutely right,” he told The Wall Street Journal, talking about the debt impact. Reps. Thomas Massie and Warren Davidson also sided with Elon and voted against it.

White House aides said Elon’s attacks are backfiring. They believe his criticisms are actually pushing Republicans closer to Trump, not pulling them away. Still, Trump’s allies admit it’s getting harder to hold the line with Elon raging online to 220.5 million followers.

Elon’s not stopping there. On Thursday, he polled users on X asking if they’d support a new political party. More than 3.5 million people voted. Over 81% said yes. That’s not just talk—it’s a warning. Trump’s grip on the House is already razor-thin. If Elon splits the base or funds candidates to knock out Trump loyalists, Republicans risk losing the chamber in 2026.

One Republican on the House Financial Services Committee said Elon’s outbursts are “not helpful.” He also warned that the standoff could damage Elon’s long-term relationships with GOP lawmakers, especially those who used to see him as an ally.

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