(Official White House Photo by Molly Riley)

(The White House/Molly Riley)

Here’s what Musk stands to lose from the US government

Tesla, SpaceX, and xAI all could face serious trouble if Trump turns the government on Musk.

6/6/25 12:56PM

Elon Musk’s messy public breakup with President Trump appears to be causing damage to both men’s fortunes, but Musk has more to lose thanks to his companies’ many entanglements with the US government.

Trump has shown that he’s willing to turn the mighty power of the US government against his enemies to settle personal beefs, including law firms, individual cybersecurity experts, and the paper straw industry. Let’s take a look at what Musk and his businesses face to lose if the rift worsens.

SpaceX

SpaceX receives a huge amount of money from the US government. In February, Reuters reported that SpaceX CEO Gwynne Shotwell said the company has about $22 billion in government contracts. Sherwood News’ reporting found that between contracts for launching military satellites for the Department of Defense and ferrying astronauts and supplies to the International Space Station for NASA, the US government had paid SpaceX over $18.5 billion through September 2024.

The government is also a big customer for SpaceX’s Starlink satellite service. The Department of Defense signed a contract for Starlink terminals, which it supplied to Ukrainian forces to defend itself from the Russian troops.

Musk’s long-term goal is to get humans to Mars to make humans an multi-planetary species. SpaceX’s Starship is essential to making that sci-fi dream come true (if they can keep the gleaming rockets from exploding). Musk’s plans involve increasing the frequency of Starship flights from the newly minted town of Starbase, Texas.

The spectacular failures of the rockets have affected US commercial airspace, and the Federal Aviation Administration has the authority to approve or cancel these launches.

A SpaceX Starship rocket launches from Starbase, Texas on May 27, 2025. (Sergio Flores/AFP via Getty Images) — A SpaceX Starship rocket launches from Starbase, Texas, on May 27, 2025 (Sergio Flores/Getty Images)

Tesla

One of Tesla’s key risks stems from the crucial role that federal regulation plays in the company’s immediate plans: self-driving cars. Musk is betting the business on the yet to be released Cybercab, which could be derailed if the National Highway Traffic Safety Administration decides to take action following alarming videos of fatal crashes using Tesla’s long-promised “full self-driving mode.”

101st Brussels Motor Show 2025 — Cybercab (Sjoerd van der Wal/Getty Images)

One of the biggest consumer incentives driving EV sales is the $7,500 rebate available for new EV vehicles. (It’s up to $4,000 for used EVs.) If the Trump administration succeeds in killing these Biden incentives in their “big, beautiful bill,” that would amount to a significant price hike for Teslas at a time when its US sales are down 5%, while EV sales overall are up 17%.

That legislation, which is currently being negotiated in Congress, also includes a provision that charges EV drivers an annual $250 fee for contributions to the Highway Trust Fund, which gas-powered car drivers pay into via gas taxes (though gas car drivers pay far less than that annually).

Tesla’s business is also propped up by regulatory tax credits, which accounted for $595 million last quarter. The credits are sold to automakers that aren’t meeting emissions regulations. If you take away those credits sales, Tesla’s last quarterly profit would have turned into a loss.

While not directly under Trump’s control, state governments also have a lot of say over the tax breaks that Musk’s businesses get, like the $1.3 billion worth of incentives that Nevada offered Tesla for its Nevada Gigafactory.

Investors seem to realize what Tesla could lose as a result of this beef, evidenced by yesterday’s historic drop in Tesla’s stock, wiping out $152 billion in a matter of hours.

xAI and X

There are a lot of X’s flying around here. xAI is Musk’s AI business that created the Grok LLM forged in the heart of the Colossus supercluster’s 100,000 Nvidia GPUs.

colossus xAI data center — Gas turbines are visible at an xAI data center on Riverport Road in Memphis, Tennessee, on April 25, 2025 (Brandon Dill/Getty Images)

A few months ago, xAI bought X, the social media network formerly known as Twitter. That massive data center near South Memphis, Tennessee, has been spewing methane emissions into the air via unlicensed gas turbines needed to boost the power for the data center, watchdog reports have found.

Federal agencies could give Musk some headaches here, if they suddenly decided clean air was a priority.

Neuralink

When your business is installing hardware in people’s brains, government regulation could make or break you. One call to the Food and Drug Administration and Trump could kill human trials for Neuralink implants currently underway, which are regulated by the agency.

Tariffs touch everything

From the microprocessors in Tesla’s cars to the steel shell of the Starship, all of Musk’s businesses are affected by tariffs on imported materials. The whipsaw back-and-forth on tariffs could continue to cause problems for Musk’s companies. If Trump were to reach for one of his favorite tools to cause pain for Musk, he could target crucial components that Tesla, SpaceX, or xAI needs to grow.

Walt Hickey

shutdown watch

10/21/25

Traders are getting more and more pessimistic about the government shutdown ending any time soon

The market expects the shutdown to last well into November.

Jon Keegan

10/10/25

OpenAI’s internal Slack messages could cost it billions in copyright suit

Authors and publishers suing OpenAI over copyright infringement were granted access to internal OpenAI communications about the deletion of a pirated books dataset, and now want to review attorney communications.

Max Knoblauch

10/9/25

US corporate spending on private flights for executives has ballooned in recent years

The median expense spent by America’s largest companies on air travel jumped 66% from 2020 to 2024.

Claire Yubin Oh10/1/25

OK, so when was the longest shutdown in US history?

The US government officially shut down at 12:01 a.m. on Wednesday after senators failed to agree on a last-minute funding bill. Though initially shrugging off the threat of a shutdown during yesterday’s session, stocks were mildly in the red on Wednesday as investors reacted to what is now the 11th shutdown in the government’s history.

Until this latest shutdown, there had been 20 government funding gaps experienced since 1976 — though not all ended in a full shutdown, with full closure averted in half of those cases.

Indeed, prior to the 1980s, funding gaps didn’t typically have major effects on government operations, with agencies continuing to operate on the basis that the funding would come eventually. However, a more stringent interpretation of the rules led to a stricter appropriations process from the early 1980s onward, with many subsequent funding gaps resulting in a shutdown of affected agencies (unless the gaps were quickly fixed or occurred over a weekend).

Obviously, the duration of the latest shutdown is still unclear, but it will continue until Congress passes a funding bill — most likely via a “continuing resolution,” which has ended every shutdown since 1990. Data analyzed by USAFacts suggest that it might not be a one- or two-day affair, as funding gaps have lengthened in recent years.

Government shutdown patterns — Sherwood News

Indeed, the last shutdown, which began in December 2018, ended up becoming the longest in history, at a whopping 34 days. By the time the government reopened in January 2019, about $3 billion (in 2019 dollars) had been wiped from the GDP in Q4, per data from the Congressional Budget Office, with approximately $18 billion in “federal discretionary spending” delayed over the roughly five-week stretch.

Max Knoblauch9/24/25

GM climbs following upgrade, report that Trump administration seeks stake in its lithium mine partner

Shares of General Motors rose more than 2% in premarket trading Wednesday following an upgrade of the stock by UBS from “neutral” to “buy.” The firm also hiked its price target for GM by 45% to $81.

Also likely elevating GM was a Reuters report that the Trump administration is exploring taking a 10% stake in Lithium Americas, the automaker’s partner in a yet to open Thacker Pass lithium mine. Shares of Lithium Americas surged 68% in the premarket.

GM, which invested $625 million into the lithium mine last year, holds a 38% stake in the joint venture. The mine is expected to become the Western Hemisphere’s primary lithium source in 2028, when it’s slated to open, producing enough of the metal to make 800,000 electric vehicle batteries.

Prior to its plans for Lithium Americas, the Trump administration last month said it would take a 10% stake in Intel. In July, it announced a 15% stake in rare earths miner MP Materials.