The friendship between Donald Trump and Elon Musk is known to the whole world. Moreover, Elon Musk has even called Donald Trump his ‘first buddy’ until they are no longer. But why? What led to the bond between the President of the US and the wealthiest man in the world to fall off like that? Let’s find out the possible reasons for their dispute in this article.
How did the fight begin?
As you know, Elon Musk has been a special member of DOGE, which was administered by President Donald Trump. The initial month went smoothly, but soon both parties started having disagreements on the government policies initiated by the committee. In several interviews, Elon Musk has even shown frustration with the political work he has gotten himself into and has been criticizing the policies even more after his resignation. It all started when he criticized Donald Trump for the massive tax and domestic policy bill for not being good for the economy in the long run.
Elon Musk and the support
In the voting on this bill, Elon Musk is not getting enough support to turn the tables. Moreover, only three Republicans are in support of Elon Musk’s statements. Two of them- Reps. Thomas Massie and Warren Davidson were against the bill from the beginning and thus, are supporting him. Moreover, Donald Trump is still under pressure because if even one vote exceeds three, then the bill will not pass in the parliament.
What is Elon Musk’s stake?
Elon Musk has several billion-dollar projects signed with the government for his company, SpaceX. These include projects with NASA for $15.2 billion, and $5.8 billion from the Department of Defence, the withdrawal of which could cost huge losses for his money. Amid the fight, Donald Trump has already indicated the loss in Musk’s business and is now fiddling with his deals with the government.
As mentioned, the government deals are important funding for Elon Musk as they are directly linked to all three companies owned by him. If these deals are broken, it will pose a new headache for Elon Musk as SEC investigations will start interfering with X while he will already be dealing with the other two companies of Musk companies. Even though SpaceX has considerably fewer contracts with the government, many policies impact the cost of the company adversely.
JP Morgan’s letter to Elon Musk’s criticism
JP Morgan has released a letter to the clients telling them about Elon Musk’s financial condition. According to them, Elon Musk’s Tesla is going to suffer more losses if the EV tax credit is levied on the company. He has also mentioned that a $1a billion loss is estimated on this tax which will ultimately lead to a $2 billion loss in the sales of Tesla.
Tesla has not been performing well for a year, which can also be explained by Elon Musk’s involvement in political matters. Due to diverted attention, the sales of EV cars continuously fell over the year leading to huge losses. Moreover, Elon Musk is now also criticizing the bill being passed by Donald Trump, which will eventually cost him his contracts with the government.
The political controversies surrounding Elon Musk have made it even worse for him. The stocks of Tesla are declining rapidly. In addition, the policies taken by Donald Trump will directly affect the cost of the company as well as the shares will fall. This is a serious concern for him as one wrong step can ruin his years of hardwork.
Conclusion
Elon Musk’s interference in political matters started his downfall. Due to improper attention on his business, the sales of Tesla have declined significantly. Moreover, the political controversies have worsened the case as Tesla is boycotted by the public. If Elon Musk continues to go against the said bill in parliament there is a possibility that his government contacts will be ceased immediately. In such situation, Elon Musk must choose the best interest of his companies and make a decision.
