The clash between the president and Teslas C.E.O. wiped billions off the electric vehicle maker’s market capitalization. Other risks abound.
Can the alliance be fixed?
The world was riveted on Thursday when President Trump and Elon Musk clashed — repeatedly, bitterly and sometimes pettily — online and in the Oval Office, in a dramatic rupture of their alliance that many believed was inevitable.
There were signs of a cool down on Friday. There’s a lot at stake in Musk and Trump making amends, including for Musk’s businesses, his rivals and perhaps Republicans’ fortunes. No matter what happens, one of the most consequential political alliances in decades may be irrevocably damaged.
The highlights: After days of Musk assailing the Republican budget bill, a centerpiece of Trump’s economic agenda, the president let loose on Thursday: “I’m very disappointed in Elon,” he said, adding that he would have won Pennsylvania in the 2024 election without the Tesla chief’s millions.
Things then got more heated:
“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” Musk wrote on X.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump wrote on Truth Social. “I was always surprised that Biden didn’t do it!”
Musk responded that he was prepared to decommission the SpaceX Dragon spacecraft that NASA uses to get astronauts to the International Space Station, though he later backed off.
“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!,” Trump added.
Musk claimed that there were references to Trump in government documents about the late financier and sex offender Jeffrey Epstein. “Have a nice day, DJT!” Musk wrote.
Observers of all political persuasions weighed in. “BBB actually stands for Big beautiful breakup,” the conservative activist Laura Loomer wrote on X, referring to the Republicans’ One Big Beautiful Bill Act. Representative Alexandria Ocasio-Cortez, Democrat of New York, said, “The girls are fighting, aren’t they?” (It’s an allusion to a meme.)
Even Kanye West weighed in: “Broooos please noooooo 🫂 We love you both so much.”
Tempers appear to be cooling. Responding to a plea for peace by the billionaire Bill Ackman, Musk responded, “You’re not wrong.” But news reports were contradictory about whether the two will speak on Friday; Trump told ABC’s Jonathan Karl that he’s “not particularly” interested in talking with Musk.
The consequences of a failed truce are gigantic:
Tesla’s stock price plunged 14 percent on Thursday, wiping out over $150 billion from its market cap, its worst-ever one-day performance. Beyond the loss of the E.V. subsidies the Republican bill would eliminate, investors feared that Trump regulators could crack down on Tesla’s robotaxi efforts.
The prospect of SpaceX losing even some of its government contracts would hurt. (That possibility likely delighted rocket rivals including Jeff Bezos of Blue Origin and Kelly Ortberg of Boeing.) Meanwhile, what if Musk followed through on the decommissioning of the Dragon spacecraft — or even disabled the U.S. government’s access to the Starlink internet service?
Could a drawn-out fight mean that Trump would somehow hamstring xAI even as he champions other American artificial intelligence companies? Sam Altman of OpenAI was probably feeling relieved that Musk wouldn’t be able to interfere in his ambitious initiatives.
Republican leaders may also be hoping that a détente might lead to Musk dialing down his attacks on their budget bill. That said, the billionaire still appears dead set against the legislation: “If America goes broke, nothing else matters,” he wrote on X on Friday.