You Likely Don't Realise Quite How Screwed Musk Is
He has already dug his grave, but he loves to dig deeper.
The girls are fighting again — except, for one of them, it’s a fight to the death. The Trump-Musk feud was reignited recently when Musk loudly declared he would actively take down any politicians who voted for Trump’s Big Beautiful Bill. Now, don’t go thinking this has anything to do with Elon suddenly developing a sense of empathy for the American people; instead, he is just pissed that all his government money will be taken away. The bill narrowly passed the Senate, but nevertheless, Trump is done with Musk’s interference. He is now threatening to set Musk’s DOGE against him and is even “looking into” getting him deported. To most people, this sounds pretty dire to begin with, but in reality, it’s a death knell for Elon’s empire.
Let’s start with the big one: deportation. Can Trump even do that to Musk?
Well, let’s be frank here: under Trump, the laws around deportation are pretty murky. But, given that Musk is a famous white figure with right-wing backers, throwing him out without due process will almost certainly fracture Trump’s support base and limit his power. So, he won’t do that. First, he will need to vilify him, and there are plenty of ways he can do that. Musk has several open investigations into his company’s illegal actions, from wire fraud to potential manslaughter. Musk also openly launched his first companies in the US while under a student visa, making him an illegal immigrant for a while. So, if Trump wanted to deport him, there is enough dirt for him to justify it in his kangaroo court.
But would being deported even harm Elon? Tesla doesn’t really need him on-site, and neither do SpaceX or X. I can’t stress this enough: none of these companies rely on his engineering, managerial or operational oversight. The primary task he handles for them is raising capital, and many of his most prominent investors are already overseas. So, deportation would be more of a circus display of power that would harm Musk’s already tattered reputation, rather than bury him.
Of course, it goes without saying that Trump absolutely shouldn’t deport Musk…
So, threats of deportation are more of a shot across the bow. Unleashing DOGE on Musk — now that is going for the jugular.
It’s now well known that Musk built his empire with billions of dollars in federal grants, subsidies, contracts, and funds. He has received more than $38 billion from the government over the past 20 years. But what isn’t discussed is how the ongoing operation of these companies also relies on government funds.
Take SpaceX. Of the 134 launches it completed in 2024, a whopping 89 were Falcon 9 launches for Starlink. Launching Falcon 9 costs SpaceX roughly $37 million each time (which is a very optimistic figure based on erroneous claims of a 30% profit margin), and each launch carries around 49 Starlink satellites into orbit, with each satellite costing $800,000. So $6.8 billion for all 89 flights. Then there are all the operational costs required for Starship to function, which are not insignificant and could easily cost more than 30% of their revenue. So, Starlink likely cost SpaceX over $8 billion in 2024. Indeed, it was found that Starlink was losing serious money on every terminal it sold in 2024. With Starlink recently deorbiting nearly 500 satellites and sales not growing as expected, Starlink is almost certainly not profitable.
As such, most of SpaceX’s profitable activities come from government launch contracts and private launch contracts. Of these launches, 20% were from the US government. But SpaceX has been found to charge the government significantly more for a launch than commercial clients (averaging $200 million per launch); therefore, its government launches are likely SpaceX’s primary source of profit.
SpaceX has $22 billion worth of contracts with the US government. This was the beating heart of SpaceX that has kept it alive. However, Trump and DOGE could easily wipe out almost all the programs that awarded these contracts, leaving SpaceX totally financially stranded.
With Starship’s development stagnating, years behind schedule, miles away from usability, and consuming billions of dollars per year, cutting off SpaceX’s financial lifeline now could have terminal implications.
And then there is Tesla.
Tesla is in crisis right now. Its Q2 2025 sales were down 13.5% compared to Q2 2024. Its grip on the market has noticeably slipped, with its share of the EV market falling from 12.6% in May 2024 to just 7.2% in May 2025. Naturally, its profit margin is dire, with its operating margin for Q1 2025 at a staggeringly low 2.1%. The sales and profit situation is so bad that J.P. Morgan, a bank that has openly been a Tesla bull for years, is predicting Tesla shares will fall by another 62% over the next 12 months. On top of all of this, Tesla’s terrible Robotaxi (read more here) is beginning to burst the hype bubble that Musk had built around Tesla automation for the past decade. This was the factor that sent Tesla shares soaring in the first place — with that hype bubble potentially vanishing, we could see the share price crash substantially lower than 62%.
Yeah, things are not looking good for Tesla. However, they have a lifeline in the form of EV subsidies and carbon credits. In 2024, Tesla generated $2.7 billion from the sale of automotive regulatory carbon credits and approximately $1.2 billion from EV tax credits. That means that over half of its 2024 profit came from US government handouts. It also means that, right now, with Tesla’s profit margin being so close to zero, these credits are the only thing preventing Tesla from posting annual losses in the billions of dollars.
Trump’s Big Beautiful Bill is set to scrap both EV tax credits and the carbon credit schemes, which would send Tesla into the red — hence why Musk is so opposed. If the bill doesn’t pass, he could always scrap these schemes through executive order. So, pushing Tesla into the red is easy for Trump. But DOGE could take it one step further. DOGE halted numerous investigations into Tesla that included wire fraud and deaths caused by FSD (Full Self-Driving). Considering how much money Tesla has historically received, DOGE could easily reopen the investigation to see if this money was “wasted” or even “fraudulent”. They are also already embedded in the organisation that enables Tesla’s Robotaxi roll-out, and considering how badly that is going, they could cite the regularity costs as “waste” and pull Tesla’s licence.
Doing so would burst Tesla’s self-driving bubble and send its stock plummeting. That, combined with multi-billion-dollar losses, could genuinely put Tesla out of business.
The question is: who is DOGE loyal to? Musk or Trump? Technically, the group isn’t under either of their control, as it has to operate in a legal grey area. But, with the courts granting Trump more power by the day, he may not even need DOGE to do his illegal dirty work.
So, yes, the girls are fighting again. But for Trump, this is just a nuisance. All he has to lose are his optics; there is nothing material at risk for him here. Sure, there is a risk that his support base might fracture slightly, but he is moving towards becoming a dictator, and those close to him, who are giving him additional power, are loyal to him, not Musk. So, a backlash from his own support base won’t affect him all that much at all. But for Musk, everything is on the line. If this bill passes, Tesla is at serious risk. If Trump retaliates, SpaceX and Tesla could face collapse. This is a fight between a loud, wounded mouse and a giant, power-hungry elephant. Trump could crush Musk with next to no effort.
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Sources: Carscoops, The Guardian, Trading View, The Independent, BBC, Space.com, NY Post, Reuters, Will Lockett, Forbes, Reuters, Carbon Credits, Will Lockett, Popular Mechanics, NBF, Payload, Statista, Space.com, Space News, Will Lockett, Futurism