In face-off with Trump, Tesla shares plunge and Musk threatens NASA
Musk announced he will retire the Dragon spacecraft, currently the only U.S. vehicle capable of carrying humans into orbit and used by NASA.
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Musk Escalates Feud with Trump, Vows to Retire Dragon Spacecraft Amid EV Subsidy Clash
Elon Musk, CEO of Tesla and SpaceX, has sharply escalated his criticism of President Donald Trump’s sweeping tax legislation, prompting a dramatic fallout that included Musk announcing the immediate decommissioning of SpaceX’s Dragon spacecraft. The move rattled markets and sent Tesla stock plummeting nearly 15%—wiping out about $150 billion in market value.
Dragon is currently the only U.S. spacecraft capable of carrying astronauts to orbit and is central to NASA’s $4.9 billion contract with SpaceX for International Space Station (ISS) missions. Retiring the capsule could seriously disrupt the ISS program, which relies on cooperation among dozens of countries. Without Dragon, Russia’s Soyuz would remain the sole crewed option for ISS transport.
Musk’s decision came in direct response to a post by Trump on Truth Social: “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.”
The public clash has put severe strain on what had once been a close relationship. “Look, Elon and I had a great relationship. I don’t know if we will anymore,” Trump said Thursday. “He said the most beautiful things about me. And he hasn’t said anything bad—yet. But I’m very disappointed.”
Tensions rose after Musk, a major Republican donor and head of the Department of Government Efficiency (DOGE), began openly opposing the president’s key spending bill. On X, Musk called the legislation a “disgusting abomination,” arguing it wipes out the cost-saving measures implemented by DOGE. He also urged Congress to reject the bill.
The dispute appears to be eroding support for Musk’s companies across the political spectrum. Tesla sales have slumped in core markets including California, Europe, and China, even as global EV sales continue rising. Investors and analysts now warn that Musk’s political flip-flops—initially aligning closely with Trump, and now turning on him—are alienating both conservative and liberal Tesla buyers.
“His politics continue to hurt the brand,” said Dennis Dick, chief strategist at Stock Trader Network. “First he embraced Trump, then he turned on him. It’s created confusion and backlash.”
The current House version of the budget bill includes phasing out the $7,500 federal EV subsidy by the end of 2025. According to JP Morgan, Tesla could face a $1.2 billion profit hit and a further $2 billion loss from regulatory credit sales if separate Senate legislation targeting California’s EV mandates is passed.
Though SpaceX and Starlink remain dominant in their respective fields, they too could face political headwinds from Musk’s deteriorating relationship with Washington. Since Musk publicly endorsed Trump’s 2024 re-election campaign last July, Tesla shares soared 169% through mid-December but have since plunged 54%, in part due to growing protests and political backlash.
Musk has said he intends to scale back his involvement in Washington and refocus on his companies, but the fallout from his break with Trump may prove difficult to contain.
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