By Kathleen Curlee

About the author: Kathleen Curlee is a research analyst at Georgetown University's Center for Security and Emerging Technology.

Elon Musk departed Washington and his post as the head of the Department of Government Efficiency last week after an unsuccessful attempt to slash government spending. Along the way, he had seemingly damaged his relationships and reputation -- with officials and with his companies' customers. Now his relationship with President Donald Trump has imploded, too, with both trading barbs on social media today. Trump even threatened to "terminate" the government subsidies and contracts awarded to Musk's companies, Tesla and SpaceX.

Some believe that by publicly turning on Trump, Musk is attempting to recover his damaged reputation. Both Tesla and SpaceX have experienced precipitous declines in public perception since Musk got tied up with Trump. But while Tesla's market share is falling and stock price is tanking, SpaceX's market lead will prove more durable.

Despite its drop in recent rankings of public perception, SpaceX is winning too decisively in market share and government contract awards for Musk's reputational risks to matter in a material way. The company is already successful, with or without a president as a close ally. And its success is only increasing.

In April, the U.S. Space Force awarded $13.7 billion in National Security Space Launch contracts; SpaceX secured approximately $6 billion of that for 28 missions. United Launch Alliance received nearly $5.4 billion for 19 missions, and Blue Origin obtained about $2.4 billion for seven. The government's diversification of contracts doesn't signal some larger retreat from SpaceX. Rather, it reflects the government's desire to hedge bets, while continuing to mostly rely on the most proven provider.

Government contracts often dominate discussions about SpaceX's revenue streams, but the company's commercial launch services have also become a significant source of income. Last year, SpaceX's launch revenue reached approximately $5.5 billion -- a 56% increase from 2023. This growth was driven not just by U.S. defense spending but the diversification of SpaceX's clientele, which includes private satellite operators and international governments.

Government restrictions, though still significant, are falling under Trump. This year, the Federal Aviation Administration permitted SpaceX a fivefold increase of its launches in Texas. And SpaceX's launch site in Cameron County, Texas, has been officially incorporated as the city of Starbase, giving the company greater autonomy over local governance.

Even if the Trump administration's de-regulatory pushes expedited these changes, it is important to note that SpaceX's lobbying efforts were influencing space policy and gaining contract wins even before Trump's second term. Trump might have sped things up, but that trajectory was already set.

SpaceX's success has been driven by its technological leadership. The company developed the first orbital-class reusable rocket and is pushing innovation by using mechanical arms to catch Starship boosters. To be sure, Musk's association with Trump certainly raised scrutiny of SpaceX. Trump's attendance at its launches and his public praise of Musk represented an unusual level of engagement between a sitting president and a private company. But SpaceX's competitors would need to match or exceed its reliable record and capabilities to fully capitalize on Musk's reputational damage -- a feat unlikely to occur within the next four years.

Tesla, on the other hand, is experiencing a real decline. In a more consumer-facing industry, brand reputation directly impacts which vehicle someone may purchase. (Launch companies are more insulated from these reputational harms because of how complex the technology is and how few companies can match its service.) Tesla dipped below 50% market share in the electric vehicles market in 2024, and its stock has fallen nearly 30% in 2025. And although it still holds 48% of the U.S. EV market, Tesla faces rising competition.

The launch industry isn't a one-company show either. Emerging players like Rocket Lab and Firefly Aerospace are innovating in areas including responsive launches and targeted orbital missions. While these companies operate on a smaller scale, their successes suggest a growing diversity in the market after a period of consolidation. Yet, SpaceX still dominates.

On X, Musk responded to Trump's threat to cut SpaceX's government contracts with a blunt challenge: "Go ahead, make my day."

Trump is unlikely to follow through with his threat; cutting funding would be self-destructive. SpaceX provides the U.S. government with essential capabilities, such as launching national security satellites and operating key communications infrastructure.

SpaceX is simply too embedded in the U.S. space and defense ecosystem to be sidelined.

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June 05, 2025 17:19 ET (21:19 GMT)

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