Elon Musk has clarified the extent of Tesla’s and SpaceX’s dependence on the US government, saying Tesla has no government contracts while SpaceX’s government revenue is expected to account for less than 10% of its total revenue this quarter. The billionaire made the remarks in a post on X (formerly Twitter) as shares of his companies fell following the Democrats’ victory in the US mid-term elections. “Tesla has no government contracts and President Trump ended federal incentives for electric vehicles,” Musk wrote. He also defended SpaceX’s government contracts, saying the company offers both the “best product” and the “lowest price”. Musk added that government revenue would fall to less than 5% of SpaceX’s total revenue a year from now. “Happy to cancel any that the government doesn’t want. Just say the word!” he said.
Tesla and SpaceX stocks fall after Democrats’ mid-term election win
Elon Musk’s remarks come after Tesla and SpaceX shares came under pressure after Democrats won control of both chambers of Congress in the US mid-term elections. Tesla shares fell around 5% in pre-market trading on November 4, while SpaceX shares dropped 6.9%, according to Bloomberg. The declines continued the following day, with Tesla falling as much as 12% and SpaceX dropping up to 11% during trading on November 5. Investors are concerned that the Democratic victory could bring greater scrutiny of Elon Musk’s businesses, including their government contracts, AI operations and the proposed Tesla-SpaceX merger. Democrats also won key races in Texas, where both companies have major operations, adding to uncertainty around their future business plans.
Elon Musk responds to proposal to cancel federal contracts
Elon Musk was responding to an X post by user Warren Redlich, who suggested that the entrepreneur send a letter to Senate and House Democrats on January 1, offering to cancel federal contracts. Replying to the post, Musk wrote:“Exactly 😂Tesla has no government contracts and President Trump ended federal incentives for electric vehicles.SpaceX contracts with the government are BOTH the best product AND the lowest price! Moreover government revenue will be less than 10% of SpaceX revenue this quarter and less then 5% a year from now.Happy to cancel any that the government doesn’t want. Just say the word!”
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