Musk and Trump to fall out in 2025, predicts analyst

Canalys Forums APAC The CEO and founder of channel-centric analyst house Canalys has predicted that the alliance between president-elect Donald Trump and aspiring oligarch Elon Musk will unravel in 2025, putting Tesla's ability to execute on full self-driving vehicles at risk.

Speaking at the Canalys APAC Forum, Brazier said the recent US election saw "two people elected" – the second being Musk, not vice president-elect JD Vance.

Brazier thinks Trump and Musk will fall out over China, because the former's proposed trade war against is at odds with the latter's reliance on China as a market for Tesla, as well as a source of batteries and other supplies.

Trump's promise to implement 60 percent tariffs on all Chinese goods therefore hurt Musk and Tesla.

Brazier also pointed out that Tesla's biggest factory is in Shanghai, and that Beijing gave the EV-maker the very unusual concession of not requiring it to operate a joint venture with a Chinese company. Tesla has also received subsidies from the Chinese state, and remains keen to expand its energy storage business there.

"Tesla needs batteries from China, or it cannot operate," commented Brazier.

"But most critically for Tesla in China, they need to offer full self-driving, or they'll fall behind the innovation of the Chinese industry." But to deliver that feature, Tesla will need to navigate China's laws around cross-border data-sharing and assure US authorities any agreement doesn't represent risk for stateside buyers.

All of this is at odds with Trump's modus operandi of "picking fights everywhere possible as tariffs come in on China," Brazier explained.

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China has begun to take the incoming administration's threats seriously, as evidenced by the Tuesday announcement yesterday regarding the export of some raw materials.

Taiwan poses another threat to the Trump/Musk bromance, Brazier observed. China has not gone to war with any nation for decades, but has expressed its intention to reunify with Taiwan. Trump has claimed that he doesn't want to pay for Taiwan's defense – but Tesla, alongside the whole of the tech industry, is dependent on Taiwan and semiconductors made there.

"Ninety percent of semiconductors are made there, mainly by TSMC, so Tesla can't function without Taiwan," Brazier commented.

But China doesn't need to invade Taiwan – or even blockade it – to hurt the global economy. Instead, it could sow chaos by cutting submarine cables – an action it's already suspected of taking in the Baltic Sea.

Taiwan could reconnect to the world using satellite broadband services like the Musk-run Starlink. But Starlink doesn't operate in Taiwan, because Musk doesn't want to upset Beijing by showing favor to the island nation, alleged Brazier.

Musk and Trump both claim to be all for small government, yet Tesla has received US government subsidies and Uncle Sam is a huge SpaceX customer.

Finding mutually agreeable positions on these issues won't be possible. Furthermore, Brazier thinks Musk's reported dislike of collegiate collaboration and sharing power will mean the relationship becomes untenable.

"Musk and Trump will no longer be friends by the end of 2025," Brazier predicted. "Give them a year to get some regulations sorted for his [Musk's] companies, and they will fall out." ®