(MENAFN- Kashmir Observer) Srinagar– A high-stakes political and business feud has erupted between Elon Musk, the world's richest man, and U.S. President Donald Trump, jeopardising billions in federal contracts, a landmark robotaxi rollout, and potentially complicating the Republican legislative agenda just months before key elections.
The once-close alliance between the two influential figures collapsed this week after Musk launched a scathing attack on Trump's sweeping tax-cut and spending bill, calling it a“disgusting abomination” and warning it could spell political disaster for Republicans. Trump, in turn, expressed“very disappointed” sentiments and signaled federal contracts tied to Musk's businesses, including Tesla, SpaceX, and Starlink, may face renewed scrutiny.
Robotaxi Rollout at Risk
The feud comes at a critical moment for Musk's Tesla, which is set to begin testing driverless taxis in Austin, Texas next week. The launch is seen as a make-or-break moment for the company amid sluggish EV sales and mounting pressure to deliver on its self-driving promises. Federal regulators were already examining Tesla's autonomous technology before the public clash, with the National Highway Transportation Safety Administration (NHTSA) requesting data on robotaxi performance in low-visibility conditions.
Tesla stock soared over 50% in anticipation of the Austin rollout, but plunged 14% on Thursday-losing $150 billion in market value-after tensions with Trump flared. It regained 4% Friday, but analysts warned the volatility could persist.
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“Tesla's recent rise was almost entirely driven by robotaxi enthusiasm,” said Morningstar analyst Seth Goldstein.“Elon's feud with Trump could be a negative.”
Federal Contracts in Jeopardy
Trump on Friday said he has no plans to speak with Musk and hinted at a broad review of the billionaire's government contracts.“We'll take a look at everything,” he told reporters aboard Air Force One.“It's a lot of money.”
SpaceX, Musk's privately held space firm valued at $350 billion, is a key NASA contractor-responsible for astronaut transport and set to return U.S. astronauts to the Moon next year. A threatened loss of support could disrupt crucial space missions, with no viable domestic alternative.
Musk briefly threatened to decommission SpaceX's Dragon capsules but later backed off. Nonetheless, concerns persist about the fallout, as the U.S. would otherwise need to rely on Russia's Soyuz capsules for space travel-an unpalatable geopolitical option.
Starlink and Global Business Deals
The dispute may also affect Musk's satellite internet venture, Starlink. The firm has recently gained traction in Saudi Arabia, India, Bangladesh, and Pakistan-countries where Musk's earlier ties to Trump may have played a role. On Friday, India confirmed a key Starlink license approval, but future deals could be clouded by U.S. political instability.
Tesla's Carbon Credits, Conservative Boycotts
A lesser-known but significant threat looms for Tesla's carbon credit business. While Musk has downplayed its importance, the company earned $595 million from credit sales in Q1 2025-up a third even as overall revenue declined. Republican senators, aligned with Trump, have inserted provisions into the budget bill eliminating penalties for automakers that miss fuel economy targets, potentially slashing demand for Tesla's credits.
Tesla is also still reeling from politically charged consumer boycotts. Musk's embrace of right-wing politics has alienated environmentally conscious buyers, and while distancing himself from Trump could bring them back, there are no guarantees. Meanwhile, earlier optimism that red-state buyers might embrace Tesla now appears dimmed.
X, Advertisers, and Legal Threats
Musk's social media platform X, formerly Twitter, is also caught in the crossfire. Large advertisers who had tentatively returned after boycotting the platform over conspiracy content may now reassess if Trump's support turns to hostility.
“There's a risk that it could again become politically radioactive for major brands,” said Cornell political scientist Sarah Kreps, though she added that a mass exodus isn't yet evident.
The platform is already under investigation by the Federal Trade Commission, and Musk has sued advertisers, calling their withdrawal an“illegal boycott.”
Fallout Spreads Across Washington and Wall Street
Musk, who spent nearly $300 million in political donations last year, previously led Trump's Department of Government Efficiency. He fell far short of his goal to slash $2 trillion from the federal budget, trimming just half a percent. The failure, and Musk's public opposition to the tax bill, infuriated Trump, who has since revoked the NASA nomination of Musk ally Jared Isaacman.
House Speaker Mike Johnson, in remarks Friday, struck a conciliatory tone:“I don't argue with him about how to build rockets, and I wish he wouldn't argue with me about how to craft legislation and pass it.”
But with the bill now in the Senate, where it faces Republican revisions, Musk's defiance could endanger its survival. Nonpartisan analysts say it would add $2.4 trillion to the national debt over 10 years.
Calls for Apology, Future Uncertain
Investor James Fishback urged Musk to apologize:“President Trump has shown grace and patience at a time when Elon's behavior is disappointing and frankly downright disturbing.”
Still, sources close to Musk say his anger is cooling and suggest he may seek to repair ties with Trump, although the path forward remains uncertain.
As of Friday, Tesla was trading at $300 per share-down from earlier-year analyst targets of $388, now revised to $330 by TD Cowen's Itay Michaeli, who summed up the week's chaos:“There are more questions than answers.”
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