Fallout with Trump: A Costly Split

In early June 2025, a public feud erupted between Elon Musk and former President Donald Trump. Musk criticized Trump’s multitrillion-dollar “One Big Beautiful Bill,” citing its rollbacks on clean‑energy incentives and fiscal irresponsibility. In response, Trump ripped into Musk, calling him “a man who has lost his mind” and threatened to end subsidies and government contracts—including those tied to SpaceX and Starlink—if Musk didn’t fall in line

The rift deepened when House Speaker Mike Johnson revealed that Musk changed his phone number following a strained call over the bill, marking the end of Musk’s informal advisory role with the Trump administration

Trump didn’t stop there; the administration reportedly launched a review of SpaceX contracts once Musk and Trump parted ways , though officials concluded SpaceX was still too strategically vital to drop.

 Tesla on the Chopping Block: Slumping Sales and Leadership Exodus

Sales Decline and Missed Targets

Q2 2025 deliveries decreased by 13.5% year-over-year, falling well short of expectations—384,122 vehicles versus about 385,000 anticipated . Analysts tie much of the decline to Musk’s highly publicized political antics and the broader “Tesla Takedown” boycott movement . Executive Departures

Senior staff are exiting at a rapid clip. North America Sales VP Troy Jones, HR director Jenna Ferrua, AI lead Milan Kovac, and Musk aide Omead Afshar have all left in recent months. Insiders cite frustration with Musk’s “erratic behavior” and political volatility.

Legal Troubles: SEC Lawsuit on the Horizon

Musk is embroiled in a lawsuit from the U.S. Securities and Exchange Commission. The SEC accuses him of delaying disclosure of a 5% stake in Twitter/X in 2022, giving him advantage in buying shares at a lower price  The deadline for Musk’s formal response has been extended to August 29, 2025, giving the SEC more time to strengthen its case.

A ruling against him could result in heavy fines and restrictions on his ability to act as a corporate executive again.

 International Woes: EU Probing X Platform

Across the pond, European authorities are examining violations of the Digital Services Act on Musk’s X platform. At issue: transparency standards, data use, content moderation failures, and the spread of antisemitic speech—such as Grok’s “MechaHitler” incident

While the probe is currently paused due to trade negotiations, the Commission warns that serious penalties—up to 6% of global revenue—could follow if X fails to fully comply

Eroding Public Trust: Polls & Investigations

A June 2025 Rasmussen-Hearthland poll found 71% of Democrats and over 50% of likely voters support legislation that could imprison Musk for his role in the Trump-aligned DOGE agency. That signals deep mistrust across the political spectrum.

Simultaneously, a House Democrats-led committee is investigating claims that Musk used illicit drugs while heading the Department of Government Efficiency. Though Musk denies the accusations, they fuel concerns about his fitness for public responsibilities.

 Corporate & Cultural Backlash: Toxic Brand Fallout

Anti-Musk forces have surged globally. The Tesla Takedown movement—comprising protests, shareholder activism, and buyback campaigns—has affected sales, shaken investors, and ignited vandalism at dealerships

Meanwhile, UK-based group “Everyone Hates Elon” staged a “rage-room” event in South London, allowing participants to destroy a Tesla Model S in protest—symbolic but potent

On social media, Reddit users warn that Musk has begun “tweaking [Grok AI] to do his bidding,” raising alarms about private citizens controlling private military-grade software and extremists propagating content with minimal oversight

 SpaceX Vulnerabilities: Political and Contractual Risks

Though SpaceX survived initial contract reviews triggered by the Musk-Trump split, ongoing tension casts shadow over future deals  With X’s European probe still active and U.S. lawmakers polarized, additional political interference could threaten SpaceX’s dominance and opportunities with NASA or Pentagons contracts.

 The Tesla Hangover: Distracted Leadership and Market Fatigue

Politico refers to Musk’s D.C. excursion as a “Tesla hangover”, noting that his political preoccupations acted as costly distractions from core business needs . As Tesla’s stock dives—down ~20% since January—and delivery declines mount, analysts like Wedbush and CFRA warn that Musk must return his focus solely to business, or risk long-term competitive erosion

🔹 Political Receding?

Musk may retreat from high-profile political roles to focus on damage control, digital and fiscal compliance, and restoring executive stability.

🔹 Legal Containment

By August, the SEC case could define his immediate financial future. A settlement or court victory would relieve pressure; a loss could seriously limit his corporate freedom.

🔹 EU Resolution

Quick resolution on X’s compliance with the Digital Services Act could prevent further sanctions, but aggressive demands may push Musk to make significant content or transparency reforms.

🔹 Brand Rehab

Tesla must reverse its sales and workforce exodus. The board will need to implement stronger governance and possibly create safe walls between Musk’s political influence and the company’s core mission.

Final Analysis: A Watershed Moment

Elon Musk is facing bad news on every front—his frayed political alliances, regulatory scrutiny, market downturns, and cultural backlash all compound. He remains a visionary, but no longer invincible.

This moment could define whether Musk transitions from tech icon to polarizing figure whose legacy is defined by scandals and split loyalty—or whether he pivots to rebuild trust, reform his approach, and salvage his disruptive vision with renewed focus and accountability.