Elon Musk, the world’s richest person, has suffered a significant financial blow after President Donald Trump’s latest public threats to cut government subsidies for Musk’s companies.The threat came amid an escalating feud between the two, which led to a dramatic 5.3% drop in Tesla’s stock on July 1st, wiping out a staggering $12.1 billion from Musk’s net worth.The loss in market value marked Musk as the largest individual loser of wealth globally on that trading day, according to Bloomberg’s Billionaires Index.
This sharp decline is a testament to how intertwined Musk’s personal fortune is with the fortunes of his companies, particularly Tesla, whose performance in the stock market can swing dramatically based on Musk’s public persona and political engagement.Despite the sharp downturn in his wealth, Musk remains the wealthiest individual on the planet with a net worth of approximately $351 billion, down $82 billion from the beginning of the year.
This latest financial hit is a direct consequence of the tense relationship between Musk and Trump, which has been in the spotlight after Musk publicly criticized the president’s recent spending bill. The conflict, which has unfolded over several weeks, culminated on July 1st, when Trump fired back at Musk’s criticisms, accusing him of benefiting from government subsidies more than anyone else in history.The trouble began on June 30th when Musk, who had been largely silent on political matters for a time, announced on X (formerly known as Twitter) his intention to form a new political party, the “America Party.”Musk’s plan was to use his financial power to target Republican lawmakers who supported Trump’s expansive $1 trillion spending bill.
Musk argued that the bill would only serve to increase the nation’s already spiraling debt. His call to action sent shockwaves through the political world, as he promised to fund primary challengers to those Republican members who voted in favor of the bill.Just hours after Musk’s posts, Trump took to Truth Social to respond, accusing Musk of being a heavy recipient of government aid. Trump claimed that without these government subsidies, Musk would have been forced to close down his operations and return to South Africa, where he was born.The president then suggested that the Department of Government Efficiency (DOGE), a controversial agency Musk had previously led, could be used to examine his financial ties with the government and potentially eliminate his subsidies.According to Trump, the removal of these subsidies would result in no more rocket launches, no more satellites, and no more electric vehicles being produced, ultimately saving the government a huge amount of money.
These remarks by Trump came on the heels of a report from The Washington Post revealing that Musk’s companies had received at least $38 billion in government assistance over the years through contracts, loans, subsidies, and tax incentives.The largest chunk of this aid has come from Musk’s aerospace company, SpaceX, which has secured approximately $22 billion in federal contracts.These include the Starship project, NASA’s chosen vehicle to send astronauts to the moon and eventually to Mars, further tying Musk’s fortunes to government contracts and making Trump’s threats particularly impactful.Musk and Trump have a long history of collaboration, with Musk previously being a vocal supporter of Trump during his 2016 presidential campaign. Musk also made significant donations to Trump’s 2020 re-election efforts, pledging over $270 million to Republican candidates.
In January, Trump appointed Musk to head DOGE, expecting the billionaire to help streamline government processes and reduce federal spending. However, the relationship between the two began to unravel as Musk grew increasingly vocal about the spending bill and other Republican policies.Musk’s outspoken criticism of the bill, which he labeled a “monstrous mistake,” caused a public rift between him and Trump, leading to the president’s threat to sever ties with Musk’s companies.In early June, tensions reached a boiling point when Musk’s criticism of Trump’s economic policies caused a dramatic drop in Tesla’s stock price. During one trading session, Tesla’s market value plummeted by more than 14%, a loss of $152 billion in a single day, with Musk’s personal wealth dropping by $34 billion.These market fluctuations underscore the delicate balance between Musk’s public statements and the financial stability of his companies. Tesla, which is heavily influenced by Musk’s personal brand and his involvement in its operations, has seen its stock price rise and fall in tandem with the controversies Musk is involved in.
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