The increasing tensions between President Donald Trump and Elon Musk on Thursday are just the beginning. A major conflict has started, and it could quickly worsen for Musk, though it may not significantly benefit Trump, except by providing a convenient scapegoat for the DOGE program’s unmet promises of government savings.
This break-up is more serious than Trump’s usual disagreements following the departures of numerous former loyalists. Musk is different. This isn’t about Musk taking a moral stance on the rising debt or any other political matter. Musk’s primary error appears to be forgetting that he was supposed to be a staffer and advisor to Trump, rather than the main figure he imagined himself to be. Trump, who prefers a leadership style where he centralizes all power and pits his subordinates against each other, has always disliked those who try to outsmart him. Trump will never accept business leaders who challenge his power.
Musk seems to have thought his wealth protected him, but this was a misjudgment. In reality, Musk’s position is much more vulnerable than many believe. Despite being the wealthiest person in the world, his wealth is quite unstable. Almost all of Musk’s net worth is in the form of stock, primarily from his significant ownership in Tesla, which is extremely overvalued with a price-to-earnings ratio exceeding 100. Tesla’s stock value decreased significantly today alone, and its inflated valuation, far removed from reality, suggests that we might only be seeing the start of a much larger decline.
Musk might believe he has influence over Trump, but he actually has very little. Trump doesn’t need Musk’s money; he can easily find other donors to replace Musk’s campaign contributions. While there are many potential campaign contributors, there is only one president. Similarly, Musk’s political reputation has become a liability. Democrats don’t want him, and he likely doesn’t fit in Trump’s Republican Party, as some MAGA supporters, like Steve Bannon, are even critical. Musk thinks he can blackmail Trump by withholding SpaceX’s Dragon spacecraft from servicing the International Space Station, but harming U.S. interests for a personal vendetta will not be well-received.
On the other hand, Trump has considerable power over Musk. Musk’s businesses heavily rely on the federal government, both operationally and financially. Besides the soon-to-be-removed $7,500 government subsidies for EV purchases and Trump’s influence on Tesla’s stock price, Tesla greatly depends on federal funding for the development of EV charging infrastructure, not to mention federal regulatory approval for his ongoing autonomous driving and robotics experiments.
So far, Tesla has avoided Department of Justice investigations and accountability for the deaths caused by the self-driving car, as well as concerns about waste, fraud, and abuse made possible by the EV tax credit and government subsidies. Likewise, SpaceX is highly dependent on direct grants and regulatory permits, clearances, and partnerships from NASA and other federal agencies. As Musk left the White House, Trump delayed the nomination of his friend Jared Isaacman as administrator of NASA, just days before Isaacman was expected to be approved by the Senate. Musk’s company is also dependent on FDA approval and clearances for its human trials of its brain-computer interface device.
Musk that Trump would have lost without the funding and the campaign efforts Musk provided to Trump’s campaign. As the relationship goes from allies to frenemies to hostile adversaries, neither side will prevail because neither can apologize and move on. Even if Musk and Trump manage to find some short-term solution, which is unlikely given the tone of Musk’s recent tweets, it is hard to imagine Trump forgiving this disloyalty.
Musk has always defied critics, reaching new heights while they are left behind. However, one wonders if we are now watching the downfall of the world’s wealthiest man in real time, with Musk finally pushing too far.
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