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Tesla’s stock took a sharp hit following a public fallout between Elon Musk and Donald Trump, ending a brief alliance that had initially boosted investor optimism. The breakup coincides with growing challenges for Tesla, including falling sales, shrinking margins, intensifying competition from Chinese EV makers and potential revenue losses if Trump’s proposed budget ends key electric vehicle (EV) and carbon credits. Investors are now reassessing the political and strategic risks surrounding the company. The drama underscores how personal politics, regulatory uncertainty and shifting consumer sentiment are increasingly shaping the fortunes of high-profile companies such as Tesla. (NY Times)
Why does this matter? This multi-front drama highlights the increasing entanglement of business strategy, political alignment and public perception. For Rio Tinto, it reinforces the need to monitor how key customers such as Tesla may shift direction – or falter – due to policy, leadership or market forces. Tesla’s volatility could affect demand for key materials such as aluminium, copper and lithium. Musk’s push into robotics and AI, meanwhile, hints at future trends in industrial automation that may influence supply chains and capital allocation. More broadly, this moment is a reminder that resilience depends not just on operational strength, but on navigating an increasingly politicised and unpredictable business landscape.
A related political row between President Trump and Elon Musk has intensified fears over major cuts to NASA’s budget. The White House proposes slashing funding by nearly half, threatening 40 ongoing or planned science missions, including climate observation and planetary exploration. Musk’s SpaceX, a key NASA partner, may also lose federal contracts, jeopardising crewed missions to the Moon and Mars. Critics warn the shift prioritises flag-planting over science and could undermine decades of international collaboration. Some argue it offers Europe a chance to strengthen its own space ambitions, but experts fear irreversible damage if missions are halted without plans to revive them.
Investor Michael Moritz called the Musk–Trump feud a cautionary tale for Silicon Valley. Musk, disillusioned with Democrats and seeking reform, has misjudged Trump’s character and governance style. While Musk runs companies with vision and efficiency, Trump is more focused on vanity projects and media headlines. Their fallout, Moritz argues, exposes deep flaws in US policymaking. Trump’s proposed budget threatens not only science and innovation, but also the very competitiveness that underpins the success of US tech and manufacturing.
Adding to the turbulence, Tesla’s head of the Optimus humanoid robot programme, Milan Kovac, has left the company with immediate effect, citing family reasons. He will be replaced by Ashok Elluswamy, who also leads Tesla’s Autopilot team. The departure comes as Elon Musk increasingly bets on robotics to drive Tesla’s future, amid declining EV sales and political controversy. Musk has said thousands of Optimus robots will be operating in Tesla factories by the end of the year, with millions more to follow. However, doubts remain over the robot’s readiness and commercial viability. Investors are cautious, even as Musk calls Optimus Tesla’s most important product yet.
In sum, the unravelling of the Musk–Trump alliance is more than a political spectacle. The row is a stark illustration of how leadership decisions, policy shifts and personal dynamics can ripple through markets and supply chains. For companies such as Rio Tinto, which sit upstream of transformative sectors such as EVs and advanced manufacturing, the message is clear – staying attuned to geopolitical risk, technological shifts and stakeholder expectations is not optional – it is strategic necessity.