Business & Finance
Tesla and SpaceX Shares Drop as Musk Clarifies Government Contract Status
Elon Musk clarified that Tesla has no government contracts and that SpaceX’s government revenue will represent less than 10% of its total revenue this quarter, with a projection of less than 5% a year from now. He posted the remarks on X (formerly Twitter) after his companies’ shares fell following the Democrats’ victory in the U.S. mid‑term elections. Musk noted that President Trump had ended federal incentives for electric vehicles and that SpaceX offers both the best product and the lowest price to the government. He added that he would cancel any contracts the government does not want, saying, “Just say the word!” Tesla shares fell about 5% in pre‑market trading on November 4 and dropped as much as 12% on November 5. SpaceX shares fell 6.9% on November 4 and fell up to 11% on November 5, according to Bloomberg. Investors are concerned that the Democratic win could lead to greater scrutiny of Musk’s businesses, including their government contracts, AI operations and the proposed Tesla‑SpaceX merger. The Democrats also won key races in Texas, where both companies have major operations, adding to uncertainty around their future business plans. Musk’s comments came after a user on X suggested he send a letter to Senate and House Democrats on January 1 offering to cancel federal contracts. Musk replied, “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 than 5% a year from now. Happy to cancel any that the government doesn’t want. Just say the word!”