Amid political tensions surrounding Elon Musk and his companies Tesla and SpaceX, US President Donald Trump has now personally spoken out – and unexpectedly provided support.
No subsidy cuts for Tesla and SpaceX
In a post on Truth Social, Trump stated that he has no plans to cut subsidies or government contracts for Teslas and SpaceXs. Rather, he emphasized:
“The better they do, the better the USA does – and that is good for all of us.”
This statement comes after weeks of speculation triggered by Trump's controversial tax and spending package “One Big Beautiful Bill Act (OBBBA)”. The law could significantly reduce state EV subsidies – a hard blow for Tesla. As recently as June, Trump had publicly hinted at wanting to review contracts with Musk's companies.
Tesla struggles with revenue declines
Trump's statements come at a critical time for Tesla:
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Revenue in Q2 2025: –12 %
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Net income: –16 %
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Deliveries: –14 %
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Stock price after hours: –9 %
Musk himself spoke in the earnings call of “some rough quarters,” as both subsidies expire and import tariffs rise.
SpaceX remains systemically relevant
SpaceX is also heavily dependent on US government contracts. Since 2008, the aerospace company has received over 22 billion US dollars from NASA, the US Air Force, and Space Force.
Currently, a 200 million dollar contract for Musk's AI startup xAI is even on the table – financed by the Pentagon, focusing on military AI applications.
Despite its importance for national security, parts of the contracts are said to have been reviewed – most of them, however, are considered “critical and untouchable.”
Musk vs. Trump: Public clash
The relationship between Musk and Trump is tense. Musk had sharply criticized the OBBBA draft and called it a “disgusting abomination”. He is particularly concerned about the potential impacts on battery costs and consumer demand.
Musk was previously a supporter of Trump and had also contributed to his re-election campaign. Trump's recent change of course could be seen as an attempt to smooth things over – not least with regard to votes in economically strong tech regions.
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