TIME
Thursday’s escalating explosions between President Donald Trump and Elon Musk are only a prelude. It is the start of a hot war, and it could soon get far worse for Musk while doing Trump little good‚other than to have a convenient scapegoat now for the unpopular DOGE with its over-promised $2 trillion of government savings.
This breakdown is far worse than Trump’s usual fallouts following the exits of scores of other former loyalists. Musk is different. This is not about Musk taking a principled stand on the soaring debt or on any other political issue. Musk’s biggest mistake, it would seem, was that he forgot his role—as a staffer and advisor to Trump, not the primary character he believed himself to be. Trump, who relies on a model of leadership where all power is centralized in himself while dividing his subordinates against themselves, has always resented individuals who try to outmaneuver him. Trump will never have any tolerance for business leaders who challenge Trump’s authority.
Musk apparently believed that his wealth insulated him, but that was misguided. The reality is that Musk’s position is far weaker than many realize, and though he may be the world’s wealthiest person, his wealth is highly precarious. Virtually the entirety of Musk’s worth is paper wealth, coming from his roughly 12% ownership stake in Tesla, which has an exorbitant valuation, trading at over 100x price to earnings. Tesla stock lost 14% of its value today alone, and its excessive valuation, wildly detached from fundamentals, suggest we could still be in the earliest innings of an even greater loss.
Musk may think he has leverage over Trump, but the reality is he has little. Trump doesn’t need his money: he can easily replace Musk’s campaign contributions to his causes with other donors. There are many possible campaign contributors, but there is only one president. Similarly, Musk’s political brand has become a liability. Democrats don’t want him and he likely has no home in Trump’s Republican Party as some MAGA loyalists such as Steve Bannon are even calling for Musk’s deportation. Musk thinks he can blackmail Trump by withholding SpaceX’s Dragon spacecraft servicing of the International Space Station, but hurting U.S. interests for a personal vendetta will not go over well with anyone.