🤝 Once Allies, Now Enemies
During the 2024 U.S. presidential election, Elon Musk gave his full support to Donald Trump, donating a staggering $288 million in political contributions. In return, Trump appointed Musk as the head of the Department of Government Efficiency (DOGE).
💥 The Beginning of Conflict: Elimination of EV Subsidies
The conflict began when Trump’s “One Big Beautiful Bill” passed. This legislation eliminated EV subsidies and supported fossil fuel industries — a move seen as a death sentence for Tesla.
- Complete elimination of EV subsidies
- Tax cuts for fossil fuel companies
- Major rollbacks on environmental regulations
💣 The Spark That Ignited the Trump-Musk War: 'One Big Beautiful Bill'
🔍 Policy Overview
- Official Name: One Big Beautiful Bill (OBBB)
- Implemented by: President Donald Trump (2025)
- Key Provisions:
- Full elimination of EV purchase subsidies
- Tax breaks and grants for fossil fuel sectors
- Broad environmental deregulation
- Massive infrastructure and defense budget increases
- Tax cuts contributing to increased fiscal deficit
💥 Musk’s Strong Rebuttal
- Musk denounced the bill as “disgusting and hateful”
- Claimed the bill threatens Tesla’s future and undermines climate goals
- Publicly criticized the bill via X (Twitter)
- Declared: “Trump would have lost the election without me”
🔥 Trump’s Response
- Labeled Musk as “ungrateful”
- Threatened to review and cancel all federal contracts with Musk
- Declared complete political severance from Musk
📉 Economic Fallout Post-Bill
| Item | Impact |
|---|---|
| Tesla Stock | Dropped 14% in one day, $46 billion market cap loss |
| Musk's Reaction | Hinted at forming a third political party, called for Trump's impeachment |
| Political Impact | Split within the GOP, realignment of U.S. political landscape |
⚠️ This bill is seen as the catalyst for the collapse of the Trump-Musk alliance and the beginning of seismic shifts in U.S. politics and economics.
🔥 Full-Blown War on Social Media
Musk criticized Trump on X (Twitter), claiming:
“He would have lost the election without me.”
Trump retaliated, saying:
“Musk is ungrateful. I will review all government contracts with him.” – Donald Trump
Musk countered by referencing Trump’s alleged connection to Jeffrey Epstein, and demanded the President’s impeachment.
📉 Economic Shockwaves
Following the clash, Tesla shares plunged 14% in a single day, erasing $46 billion in market value. Trump Media stocks also declined, heightening investor anxiety.
| Company | Stock Change | Market Cap Loss |
|---|---|---|
| Tesla | -14% | -$46 Billion |
| Trump Media | -8% | -$3.7 Billion |
🔮 Musk’s Next Move: Third Party Launch?
After severing ties with Trump, Musk hinted at political independence and possibly launching a third party — potentially disrupting the two-party system in the U.S.
🧠 Summary: Trump vs Musk Clash
- Cause: Elimination of EV subsidies and budget disputes
- Actions: Social media battle → contract threats → political attacks
- Impact: Stock declines, political realignment in the U.S.
📣 What Does This Mean for America’s Future?
This is no ordinary spat. With the blurring of lines between politics and business, the Trump–Musk clash may reshape global investment trends, U.S. industrial policy, and the upcoming election strategies.
💥 Global & Economic Fallout from the Trump-Musk Conflict
🌐 1. Global Political Impact
🏛️ (1) U.S. Foreign Policy Disruption
- Musk's companies (e.g., Starlink, SpaceX) play strategic roles in national security
- If Trump cancels Musk's contracts, key tech support for Ukraine, Taiwan, Israel could halt
- Decreased trust from U.S. allies
🇺🇳 (2) Collapse of Climate Diplomacy
- Musk is a global figure in green energy leadership
- Trump’s anti-climate agenda may isolate the U.S. from global climate agreements
🛰️ (3) Breakdown in Tech Diplomacy
- SpaceX, xAI, Neuralink are critical to U.S. tech edge
- Heightened conflict may push Musk to partner with other countries (e.g., India, UAE)
- U.S. risks losing tech sovereignty
💸 2. Global Economic Impact
📉 (1) Tesla & Tech Stocks Shock
- Trump’s EV subsidy cut threatens Tesla’s revenue base
- Ripple effects across the entire EV ecosystem
| Sector | Impact |
|---|---|
| Tesla | Revenue hit, investor caution |
| Battery Makers (e.g., LGES) | Order reductions, factory scale-back |
| EV ETFs | Increased price volatility |
💱 (2) Foreign Exchange Instability
- Musk’s criticism of the U.S. dollar or support of crypto could destabilize markets
- Shift to safe-haven assets like gold and yen
- Emerging markets may suffer from reduced capital flows
🤖 (3) Innovation Slowdown
- Loss of federal contracts may stall R&D in Musk’s companies
- Slower innovation may reduce U.S. competitiveness versus China and the EU
🧩 3. Political Risk: Musk’s Own Party?
- Rumors of Musk launching a third party (e.g., “X Party” or “TEK Party”)
- Splintering of the GOP between pro-Musk and pro-Trump camps
- More polarization → elevated political risk for the U.S.
✅ Summary Table
| Sector | Key Impact |
|---|---|
| Global Politics | Loss of U.S. trust abroad, climate cooperation setback |
| Global Economy | EV/Tech stock decline, FX volatility, innovation freeze |
| Tech Diplomacy | Weakening U.S. tech hegemony |
| Political Landscape | Third-party disruption, 2028 election instability |