The week in Musk: From bromance to blood feud

Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC. (Photo by Kevin Dietsch/Getty Images)

Gone are the days of Elon Musk professing that he loves Donald Trump as much as "a straight man can love another man." In a whirlwind back-and-forth on Thursday, Musk called for Trump to be impeached, while Trump threatened to terminate all federal subsidies and contracts that benefit Musk's companies. The fallout between the two men, who had just spent months side by side transforming Washington, was ignited by a relatively mundane issue: the budget deficit.

On Tuesday, a few days after announcing his departure from the White House, Musk said he had to speak out against Trump's "Big Beautiful" spending bill. "This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination," he wrote on X. "Shame on those who voted for it." Musk said he opposes the bill because of the trillions of dollars it would add to the federal deficit.

After initially taking the criticism in stride, Trump lashed out during a press conference with German Chancellor Friedrich Merz. "Elon and I had a great relationship," he said. "I don't know if we will anymore."

Trump has described Musk as a self-interested actor who only opposes the bill because it would cut clean energy subsidies that benefit Tesla. "[Musk] developed a problem when he found out that we're going to have to cut the EV mandate," the president said. "But I'm very disappointed in Elon. I’ve helped Elon a lot." He went on to suggest that Musk was suffering from "Trump derangement syndrome." The ailment, according to Trump, was brought on after Musk was forced to leave the White House last week, losing his access to "this beautiful Oval Office."

After watching those comments, Musk insisted on X that Trump would have lost the 2024 election "without me," referring to the nearly $300 million he donated to boost Trump's campaign. He then scolded Trump for exhibiting "such ingratitude," before endorsing a post calling for Trump to be impeached and replaced with Vice President J.D. Vance.

Things escalated from there. In several posts, he seemed to suggest that Trump was implicated in the sexual exploitation of minors. "Time to drop the really big bomb," he wrote. "[Trump] is in the Epstein files. That is why they have not been made public." The referenced set of files was compiled by the Justice Department in its investigations of the deceased sex offender Jeffrey Epstein, his associates, and his clients.

"The truth will come out," added Musk. He proceeded to share several posts highlighting Trump's relationship with Epstein, resurfacing a 2002 interview in which Trump called Epstein a "terrific guy" who likes women "on the younger side." (Musk has his own Epstein ties, including photos with Ghislaine Maxwell, a top Epstein associate and convicted sex trafficker. In 2018, a year before his death, Epstein also claimed to have advised Musk at some point. Musk has denied the claim.)

In other posts, Musk said that Trump's tariffs "will cause a recession in the second half of this year" and advised Republican lawmakers to side with him in his war with the president. "Trump has 3.5 years left as President, but I will be around for 40+ years," he wrote.

A few hours later, Musk attempted to walk back his onslaught. He signaled his agreement with a post that said he should make peace with Trump "for the benefit of our great country." At 9:20 p.m., he commented on another post advising him to "cool off and take a step back."

"Good advice," Musk replied.

He then launched into a new offensive against former Trump adviser Steve Bannon. "Bannon is peak retard," Musk wrote in three seperate posts shared at 9:41 p.m., 9:42 p.m., and 11:06 p.m. The three nearly identical posts were in response to Bannon urging Trump to seize control of SpaceX by invoking the Defense Production Act of 1950.

Tesla suffers worst selloff in five years

Musk's fallout with Trump caused tremendous ripples across the market. After weeks of gains, Tesla shares fell 14.3% on Thursday, erasing about $150 billion in the company's valuation. It was the stock's worst single-day performance since the breakout of the COVID-19 pandemic. "Investors fear that this Musk/Trump battle will stop their friendship and change the regulatory environment for Tesla on the autonomous front over the coming years under the Trump administration," Wedbush Securities analysts noted on Thursday.

Analysts from JPMorgan estimated that Tesla could take a $1.2 billion hit when Republicans in Washington inevitably end the Biden-era EV program that grants $7,500 in tax credits for Americans who purchase Teslas and other electric cars. Worse yet for the company, the Republican reconciliation bill would eliminate Tesla's ability to sell its clean energy credits to traditional automakers. Tesla earned $595 million in the first quarter from the sale of those credits. Without those credits, the company would not have been profitable.

In his Thursday posts, Musk appeared bothered by the losses that Tesla would suffer from the "big beautiful" bill, calling them "very unfair," as subsidies for oil and gas would be untouched.

Implications for SpaceX

SpaceX could also suffer mightily from the Musk-Trump blowup. "The easiest way to save money in our Budget… is to terminate Elon's Governmental Subsidies and Contracts," Trump wrote in a Thursday post on Truth Social. SpaceX has billions of dollars worth of federal contracts with NASA, the Department of Defense, and a slew of other agencies. It stood to gain billions more thanks to Musk's work for the Trump administration, including through a federal rural broadband program, the use of Starlink to upgrade air traffic control systems, and the "Golden Dome," Trump's missile defense initiative. But those prospective gains are now in limbo.

For his part, Musk has suggested that the federal government is more reliant on SpaceX than the other way around. "In light of the President’s statement about cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately," he threatened in one post, referring to the SpaceX craft that NASA uses to ferry astronauts and supplies to and from the International Space Station. In another post, Musk encouraged Trump to "make my day" by ending SpaceX's contracts with NASA, thereby ending the space agency's missions aboard the ISS. One Dragon spacecraft is currently docked aboard the ISS, along with four NASA astronauts who would need to be returned to Earth before SpaceX decommissions the craft, or risk being stranded.

However, by Thursday evening, Musk adopted a more conciliatory tone and reversed course. "Ok, we won’t decommission Dragon," he wrote.

The direction of NASA under Trump was a main point of contention in Musk's relationship with the president. Trump had nominated Jared Isaacman, a SpaceX customer who has a long history of working with Musk, to lead the agency. But Trump withdrew that nomination last week, calling Isaacman "a Democrat." (Isaacman suggested that his name was pulled due to his ties to Musk.) Meanwhile, Musk tacitly grumbled about the change on X by resharing comments Trump made in December, in which he called Isaacman "ideally suited to lead NASA into a bold new Era."

Texas legislature approves bill granting SpaceX authority over beach closures

The Texas legislature passed a bill that would grant SpaceX de facto authority to close down a state highway and a public beach ahead of its rocket launches. SpaceX would impose that authority through its municipal control of the recently formed town of Starbase, Texas. House Bill 5246 now awaits the signature of Governor Greg Abbott, a Musk cheerleader.

Also in Starbase, residents of the town were recently notified that they could "lose the right to continue using" their property. "The City is required by Texas law to notify you of the following: THE CITY OF STARBASE IS HOLDING A HEARING THAT WILL DETERMINE WHETHER YOU MAY LOSE THE RIGHT TO CONTINUE USING YOUR PROPERTY FOR ITS CURRENT USE," read a notice issued by Starbase authorities, all of whom work for or previously worked for SpaceX. The notice was sent to residents who live in areas that Starbase authorities are considering for "Mixed Use" developments.

In other SpaceX news:

• SpaceX plans to build an advanced chip packaging factory in Texas, marking another step in Musk's vision for near-total vertical integration.

• In a post on X, Musk predicted that SpaceX will generate $15.5 billion in revenue this year. The vast majority of that total would come from Starlink, SpaceX's satellite internet subsidiary, per an estimate from Quilty Space. As a private company, details about SpaceX's financials are hard to come by. But Musk's prediction for 2025 would be a dramatic increase from 2022, when SpaceX reportedly brought in $4.5 billion in revenue.

• Starlink is charging new users in parts of North Carolina and the Pacific Northwest a $500 "demand surcharge."

• The Federal Aviation Administration has asked SpaceX to investigate what led to its ninth Starship test vehicle exploding over the Indian Ocean last week.

• Using a Falcon 9 rocket, SpaceX launched the latest GPS satellite for the U.S. Space Force in record time last week. The Pentagon ordered the launch on March 7, and it took SpaceX less than three months to complete the order. The launch was originally assigned to Lockheed and Boeing's United Launch Alliance. But Space Force dropped ULA in favor of SpaceX, citing a faster turnaround and a cheaper ride, two signs of the Pentagon's reliance on SpaceX.

Tesla continues to struggle in Europe

In Europe last month, Tesla's sales slump continued in all but two countries, even as consumer interest in electric vehicles rose. Year-over-year sales fell by 36.2% in Germany, 67% in France, 53.7% in Sweden, 30.5% in Denmark, 36% in the Netherlands, 68% in Portugal, and 19% in Spain.

Even in the United Kingdom, which had been Tesla's sole positive European market in the first quarter, the company saw a more than 45% decline in its sales, even as overall sales of EVs increased by 28%. A Tesla spokesperson in the country told Reuters that they expect sales to bounce back in June, as it begins delivering the refreshed Model Y SUV.

The UK, the largest EV market in Europe, is a battleground between Tesla and emerging Chinese brands. In May, BYD, Tesla's top Chinese competitor, emerged on top: 3,025 new BYD models were registered in the UK last month, 1000 more than Tesla and a 406% jump in sales year-over-year. BYD also won out in Germany, Europe's second-largest EV market, selling about 600 more cars than Tesla in May.

But in Norway, Tesla increased its sales by 213%, jumping to 2,598 deliveries in May from 830 the previous year. On top of strong government EV incentives, Tesla is currently offering zero-interest financing for the new Model Y in Norway.

EV analyst Ben Nelmes attributed the improvement to the new model: "Tesla's strong performance in Norway points to the way forward for the company: innovate. No car company can rest on its laurels and be guaranteed success." The Tesla watchers at Electrek had another take. They called the performance a "fluke," noting that Tesla had a particularly bad May 2024 in Norway, which made the year-over-year comparison more dramatic. Still, the Model Y was the top-selling vehicle in Norway last month.

Tesla also saw a slight sales bump in Austria in May.

Executives raised concerns after Musk denied killing low-priced Tesla model

In April of last year, after Reuters reported that Musk had canceled a project to build an affordable, $25,000 Tesla model, the Tesla chief executive lashed out on X. "Reuters is lying," Musk wrote. The denial helped halt a dive in Tesla's stock price, even if it wasn't true. A new report from Reuters revealed that the post caused concern and confusion throughout the company:

Musk’s post was so confusing to some senior managers that they asked him whether he’d changed his mind. Musk rejected their concerns and said the project was still dead, according to the people with knowledge of the matter…

After Musk denied the Reuters report about killing the Model 2, executives questioned Musk about what the company should tell perplexed suppliers and investors, people familiar with the matter said.

Some executives told associates the denial made no sense -- investors and the public would inevitably learn the truth -- and worried it would hurt Tesla sales as buyers delayed purchases to wait for a $25,000 Tesla that, in reality, it had decided not to build.

The Reuters report notes that some executives feared the denial could lead to new problems with the Securities and Exchange Commission. In 2018, as part of an agreement stemming from his $40 million settlement with the SEC, Musk had agreed to have social media posts concerning Tesla's future reviewed by a lawyer before he published them. As for the "Model 2," Tesla has opted to build more affordable cars by stripping down its existing lineup instead of launching a brand new model.

Musk claims political corruption as New Jersey removes Tesla Superchargers

In a post on X, Musk accused the New Jersey Turnpike Authority of engaging in "corruption." He made the claim after Tesla was ordered to decommission 64 of its Supercharger stations from the highway that bisects the Garden State. A spokesperson for the New Jersey Turnpike Authority denied Musk's accusation.

The Tesla Superchargers will be replaced by charging stations from a third-party provider. Tesla wrote in a statement that it had prepared for the change by installing "116 stalls off the New Jersey Turnpike."

xAI seeks $113 billion valuation as it sells shares and shops debt

Morgan Stanley is shopping around an xAI debt package worth $5 billion, according to Bloomberg. The joint social media and AI venture will spend the proceeds on general corporate expenses. Meanwhile, per the Financial Times, xAI plans to move $300 million in stock in a sale that would value the privately held company at $113 billion. The terms of the deal will permit xAI employees to sell their shares to outside investors.

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Musk Minutes

The New York Times reported that Musk was using a number of drugs while campaigning for Trump last year, "taking so much ketamine, a powerful anesthetic, that it was affecting his bladder, a known effect of chronic use. He took Ecstasy and psychedelic mushrooms." After Musk accused the paper of "lying their ass off," the Times said in a statement that the report was thoroughly sourced and that Musk was "just lashing out because he doesn’t like our article." Musk has previously admitted to using ketamine and said last week that the drug "helps for getting out of dark mental holes," but insisted that he has stopped taking it. (New York Times)

The proposed $300 million deal between Telegram and xAI remains unfinished. "No deal has been signed," Musk wrote in response to a post from Telegram's Pavel Durov claiming that xAI would pay his company for the right to integrate its Grok chatbot into Telegram. Durov then tried to brush off Musk's hesitancy, saying an agreement was made "in principle" while formalities are "pending." (Fortune)

A new survey from the Pew Research Center found that 55% of left-leaning users on X believe the platform prioritizes conservative views over liberal ones. Roughly the same percentage of right-leaning X users say the platform supported liberal and conservative beliefs equally. Liberals are far more likely than conservatives to say that misleading information and harassment are major problems on X. The survey also found that 40% of Democrats report negative experiences on X, compared to 11% of Republicans. Among racial groups, white users are the most likely to say that their experience on X is mostly positive. (Pew Research Center)

The NAACP sent a letter to officials in Shelby County, Tennessee, urging an emergency shutdown of xAI's Colossus supercomputer. "Being the world's richest man doesn't give you the right to pollute Black communities and jeopardize the health of its residents," NAACP president Derrick Johnson said. "We urge the health department to step in immediately." The xAI facility is running on an array of gas turbines that have polluted the air of a nearby historically Black neighborhood. (NBC News)

In response to a lawsuit filed by the Washington Post, Tesla said it "would suffer financial and economic harm" if crash details related to its self-driving software became public. The Post is seeking additional information from the National Highway Transportation Safety Administration about crashes that involved the use of Tesla's Autopilot and Full Self-Driving products. But the automaker has asked a judge to block the request, arguing that acquiescing to the newspaper's demands would provide sensitive information to industry rivals. (Reuters)