Donald Trump has attacked Elon Musk as “crazy” and threatened to rip up his government contracts, as the spat between two of the world’s most powerful men erupted into an all-out public feud.

In a flurry of bitter comments in the Oval Office and online on Thursday, the US president said he was “very disappointed” in Musk for criticising his signature tax bill, suggested he had “become hostile” after being turfed out of government, and accused the billionaire of intervening in politics to serve his business interests.

Musk, who spent more than $250mn bankrolling Trump’s re-election bid last year and said in February that he loved the president “as much as a straight man can love another man”, returned fire on X.

The billionaire called for Trump to be impeached, suggested his trade tariffs would cause a US recession, threatened to decommission SpaceX capsules used to transport Nasa astronauts and insinuated the president was associated with the late paedophile Jeffrey Epstein.

The enmity deepened through the day, opening a breach that could widen long into Trump’s presidency and even influence US electoral politics, with Musk talking of starting a new party and removing Republicans from office.

Trump, who had previously defended Musk against charges of corruption and self-dealing, said the Tesla boss had soured on his “big beautiful bill” because it would end policies that benefited the electric-car maker.

“I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote on Truth Social on Thursday afternoon.

“The easiest way to save money in our Budget . . . is to terminate Elon’s Governmental Subsidies and Contracts,” he added, in an apparent threat to end billions of dollars’ worth of business between the US government and Musk’s companies, including SpaceX and Starlink.

Musk, who is upset that the tax bill now before the Senate would increase the US deficit, accused the president of lying about his motives.

The exchanges were an extraordinary escalation of the feud between Trump and Musk, who had refrained from criticising the president directly even as he opposed the White House’s trade and tax policies.

The billionaire, who in April began his retreat from politics because of the “blowback” against his businesses, also suggested that he now regretted backing Trump during last year’s White House race.

“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” he posted on his social media site X soon after the Oval Office tirade. “Such ingratitude.”

Shares in Tesla fell by almost 11 per cent following Trump’s remarks and were down 13.5 per cent on the day, wiping more than $150bn from its market valuation — its biggest one-day drop in value ever.

Musk, the US’s largest political donor, also suggested that Republican lawmakers should side with him over the president.

“Some food for thought as they ponder this question: Trump has 3.5 years left as President, but I will be around for 40+ years,” the billionaire wrote on X.

He also hit back at Trump’s suggestion that he had opposed the “big beautiful bill” because it axed tax credits for electric vehicles and clean energy, which have long benefited Tesla in the US.

“Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” Musk posted.

The deepening discord between Trump and “first buddy” Musk has in recent days spread through Washington.

Last week, Trump pulled the nomination of billionaire astronaut Jared Isaacman, a close ally of Musk, to lead Nasa, ostensibly over contributions he had made to Democratic candidates in the past.

Isaacman, who was on track to receive bipartisan support from the Senate, disputed the White House’s justification for the decision.

“I don’t think the timing was much of a coincidence,” Isaacman told the All-In podcast on Wednesday. “There [were] some people that had some axes to grind, I guess, and I was a good, visible target.”

Musk had already announced that he was stepping back from his involvement in the Trump administration, where he had led the so-called Department of Government Efficiency (Doge).

Steve Davis, one of Musk’s lieutenants at SpaceX who led Doge on a day-to-day basis, had also now left the administration, according to a government official.

More senior figures close to the billionaire were set to abandon the initiative in the coming days, the official said.

Musk himself has suggested that the tax bill would wipe out any savings made by Doge, which claims to have identified roughly $180bn in cuts to date. On Wednesday, the congressional fiscal watchdog said the legislation would add $2.4tn to the US debt by 2034.

WASHINGTON — If President Donald Trump were to follow through on his threat today to cancel all government contracts with billionaire Elon Musk, it would likely derail Pentagon and Intelligence Community space operations, and specifically in the near term cripple the Space Force’s National Security Space Launch (NSSL) program, due to the US government’s reliance on SpaceX rockets.

Trump and Musk, formerly a close advisor, engaged in a bitter and escalating war of words this afternoon on social media following Musk’s sharp criticism on X of Trump’s giant budget reconciliation package self-dubbed the “Big, Beautiful Bill.”

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump posted on his own social media site in response to Musk’s criticisms and Musk’s suggestion he might consider backing the creation of a third political party.

Musk fired back, “Go ahead and make my day!” in a post on X, and followed up with another saying, “In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately.”

It’s unclear, on both sides, how much of the social media spat is bluster destined to blow over — not to mention the myriad contractual and legal complexities that would be involved in actually disentangling the US government from business with Musk in a number of areas.

But any decommissioning of SpaceX’s Crew Dragon spacecraft would immediately be felt by NASA, which uses the craft to ferry astronauts to and from the International Space Station.

Beyond that, any potential freezing of contracts for SpaceX equipment and operations also would have far-reaching impact on the DoD and IC. NSSL is the primary acquisition program for space launches by the Space Force and IC, namely the National Reconnaissance Office (NRO) that builds the nation’s spy satellites. And at the moment, SpaceX’s Falcon series are the Space Force’s go-to rockets for putting the most critical payloads into orbit.

Killing SpaceX’s DoD contracts wouldn’t quite ground the Space Force, but it likely would significantly slow things down. Back in 2020, the Space Force contracted SpaceX and the Lockheed Martin-Boeing joint venture United Launch Alliance (ULA) as the only two providers able to compete for NSSL missions under the Phase 2 program, covering launches from fiscal year 2022 to 2027.

For the earlier missions in that time frame, ULA was offering its Delta IV and Atlas 5 for launches of medium- and heavy-lift missions, but for later years the company intended to use its new Vulcan rocket — which unlike the Delta and Atlas is using US-made engines rather than Russian ones banned by Congress as of the end of 2022.

However, ULA has had years of setbacks with Vulcan’s development. The rocket was technically certified by the Space Force for NSSL launches only in March. However, a senior Space Force officer on May 14 told the House Armed Services Committee that the company still has “open work” to finish before actually taking on NSSL missions.

“Risk reduction plans have been agreed to and signed between the Space Force and ULA to reduce known risks to flyable ‘Low-Medium’ prior to the first NSSL Vulcan launch,” said Maj. Gen. Stephen Purdy, acting assistant secretary of the Air Force for Space Acquisition and Integration.

The first Vulcan mission is USSF-106, slated to go up in July.

The Space Force recently switched two earlier planned missions to launch new GPS satellites from Vulcan to SpaceX’s Falcon 9 to help remediate a backlog caused by the delay in getting Vulcan certified. The latest of the two, the launch of GPS III Space Vehicle-08, successfully lifted off on May 30 with a record turn-around time of only three months.

The Space Force further has issued contracts for critical launches under the follow-on NSSL Phase 3 Lane 2 program, for launches between fiscal 2027 and 2032, to ULA, SpaceX and newcomer Blue Origin with its New Glenn rocket.

Under the new awards, SpaceX is “anticipated” to undertake 28 NSSL Phase 3 Lane 2 missions, about 60 percent of the launches contracted from FY25-FY29, for a sum of around $5.9 billion, and ULA 19 missions, about 40 percent, Space Systems Command (SSC) announced April 4. Blue Origin, “is projected to be awarded seven Phase 3 Lane 2 missions starting in Order Year 2,” of FY26, SSC added.

The future NSSL program also envisions that a number of small- and medium-launch providers will compete for less critical missions going to lower orbits, under the Lane 1 acquisition track. Lane 1 launch providers face fewer requirements to be certified by the Space Force than those qualified to launch under NSSL Phase 3 Lane 2. So far, the Space Force has given SpaceX, ULA , Blue Origin, Rocket Lab and Stoke Space the thumbs up to participate.

But the bottom line is that SpaceX has been, and appeared up to now to be for the near future, the dominant US space launch provider. The company was responsible for 98 of the total 109 US military, civil and commercial launches in 2023 and 138 out of 145 US launches in 2024, according to Jonathan McDowell, an astrophysicist with the Harvard–Smithsonian Center for Astrophysics who maintains the world’s largest open-source database on space launches.

That’s before evening getting into the potentially thornier issue of military use of SpaceX’s Starlink satellite communications and the reported use of Starshield buses for the NRO’s new constellation of hundreds of satellites in low Earth orbit.

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Investment in fossil fuels will fall this year for the first time since the Covid pandemic, according to the International Energy Agency, led by a contraction in the oil sector where a sharp drop in prices is forcing companies to reassess their plans. 

In its annual report on money flowing into the energy sector, the IEA predicted a 6 per cent drop in spending on oil production this year. Excluding the Covid-19 pandemic years, it will mark the largest fall since 2016, when oil prices crashed below $30 a barrel. 

“This is the first time we have seen such a decline, except for Covid, because of lower prices and lower oil demand,” said Fatih Birol, the head of the Paris-based intergovernmental energy advisory body. 

Since hitting $82 a barrel in mid-January, oil prices have fallen to about $65 a barrel after Opec, the oil cartel, started to significantly increase its production. The IEA said US shale oil producers, who account for 15 per cent of global spending on oil production, were the most sensitive to lower prices and would cut their investment by 10 per cent this year. 

It also expects international oil majors to slightly reduce their spending, as they prioritise shareholder returns. The pullback means that the giant state oil companies of the Middle East and Asia will account for 40 per cent of all spending on oil and gas this year, compared with a quarter ten years ago. 

International oil companies are also continuing to cut their spending on clean energy, with the IEA noting that they had collectively invested $22bn in low emissions technology in 2024, some 25 per cent less than the year before.

Overall, the IEA said the world would spend $1.1tn on fossil fuels in 2025, compared with more than $2.2tn on renewable energy, nuclear, batteries, power grids, low emission fuels and energy efficiency. 

While overall spending on fossil fuels will shrink by 2 per cent this year, China and India have both committed to build significant fleets of coal-fired power plants to meet rapid electricity demand growth. By contrast, for the first time on record, the world’s advanced economies placed no new orders for turbines for coal-fired plants. 

“The addition of coal is mainly driven by energy security reasons,” said Birol. “China had some bitter experiences when there was very hot weather and hydropower was very weak.” 

In the US, where the Trump administration has been plain about its disdain for renewable energy, Birol said the jump in electricity demand from AI and data centres would mean that there would be an additional need for renewables, gas and nuclear.

In a separate report, Enverus, a research firm, said that while there are 517 gigawatts of renewable energy projects in the US that need federal tax credits to be viable, there are 284 gigawatts that do not require such funding.

“If these projects are built at the same pace as last year, that is enough to sustain today’s build-out pace for more than six years,” said Corianna Mah, an analyst at Enverus.