Tesla sales drop and SpaceX probes mount as Trump threatens subsidies and spectrum access
Elon Musk’s escalating feud with US President Donald Trump now threatens billions in federal contracts and intensifies regulatory scrutiny across Musk’s sprawling business empire — including Tesla, SpaceX, Neuralink, and X.
As per The Globe and Mail, Trump has publicly mused about turning the Department of Government Efficiency (DOGE) — which Musk once led — back on its creator, threatening Musk’s access to government subsidies and suggesting he could be deported.
Trump wrote on Truth Social that Musk “would probably have to close up shop and head back home to South Africa” without public funding.
Source: Donald J. Trump @realDonaldTrump via Truth Social
According to the same report, the president also stated that there would be “no more rocket launches, satellites, or electric car production,” and claimed the country “would save a FORTUNE.”
That rhetoric has cast uncertainty over Musk’s key government relationships.
SpaceX, which receives contracts from NASA including one to send astronauts to the moon next year, is already under investigation by the Federal Aviation Administration (FAA) for two launches that allegedly violated licence requirements in 2023.
According to Reuters, the FAA has proposed a US$633,000 fine, with the case still open.
Tesla is also under active investigation.
According to CNN and The Associated Press, the National Highway Traffic Safety Administration (NHTSA) has requested information following erratic driving incidents involving autonomous Tesla robotaxis in Austin, Texas.
NHTSA previously launched a probe into 2.4 million Teslas with Full Self-Driving software after multiple crashes, including one fatality.
NHTSA wants Tesla to detail how the robotaxi system performs in low-visibility conditions.
According to Reuters, the Federal Communications Commission (FCC) in April initiated a review of spectrum-sharing rules that could delay SpaceX’s efforts to expand Starlink satellite internet.
SpaceX is seeking access to new spectrum, but the FCC review could impose updated limitations based on environmental and signal interference considerations.
Meanwhile, Neuralink, Musk’s brain implant startup, is undergoing clinical trials approved by the Food and Drug Administration (FDA) after its initial request was rejected over safety risks, Reuters reported.
Neuralink is also seeking to conduct trials outside the US, including in Canada.
Musk’s social media platform X is the subject of a Federal Trade Commission (FTC) probe into coordination among media watchdogs.
According to Reuters, Musk accused these groups of orchestrating an illegal advertiser boycott. The FTC also monitors X’s compliance with data privacy rules, particularly related to children.
The Securities and Exchange Commission (SEC) is pursuing litigation against Musk related to his 2022 Twitter acquisition.
Reuters reported that Neuralink is also under SEC scrutiny, as stated in a letter posted by Musk’s lawyer.
Tesla’s stock fell 5.3 percent on Tuesday following Trump’s renewed threats and public backlash, according to The Globe and Mail.
Tesla’s vehicle sales fell to 384,122 units in Q2 2025 — a 13.5 percent year-over-year decline — marking the largest drop in company history, as reported by CNN.
Sales in Europe dropped 28 percent in May, the fifth consecutive month of decline, and Musk has acknowledged that political controversy and customer boycotts have weighed on Tesla’s performance.
Still, the 384,122 figure was higher than analyst expectations, prompting a 5% stock rally on Wednesday, according to CNBC.
Tesla also reported Q2 production of 410,244 vehicles, including 396,835 Model 3 and Model Y units, and 10,394 of other models such as the Cybertruck — which has faced eight recalls since its November 2023 launch.
The current political dispute began after Musk condemned Trump’s tax and spending package, calling it “insane” and threatening to form a new “America Party.”
If this insane spending bill passes, the America Party will be formed the next day.
— Elon Musk (@elonmusk) June 30, 2025
Our country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE.
On X, Musk stated: “They will lose their primary next year if it is the last thing I do on this Earth,” referring to lawmakers who supported the bill.
Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame!
— Elon Musk (@elonmusk) June 30, 2025
And they will lose their primary next year if it is the last thing I do on this Earth.
According to MSNBC, Musk also called Republicans the “PORKY PIG PARTY!!” and vowed to unseat them.
It is obvious with the insane spending of this bill, which increases the debt ceiling by a record FIVE TRILLION DOLLARS that we live in a one-party country – the PORKY PIG PARTY!!
— Elon Musk (@elonmusk) June 30, 2025
Time for a new political party that actually cares about the people.
Trump’s bill, which passed the Senate on Tuesday, rolls back green energy incentives introduced during the Biden administration — a change that could reduce annual EV sales by 100,000 units by 2035, as per think tank Energy Innovation cited by CNBC.
Musk’s earlier alliance with Trump had benefited investors and bolstered Tesla’s market position.
But following this falling out, Musk wrote on X: “So tempting to escalate this. So, so tempting. But I will refrain for now.”
