When Musk Met Politics

THE TAKE 

As Trump And Musk Clash, The World Learns A Lesson

The world was treated to an intense, inexplicable, and highly public spat between US President Donald Trump and Tesla founder Elon Musk. 

While the exchange may appear confined to the United States, the lessons behind it—and the events leading up to it—should concern both business leaders and policymakers across the world.

India, as we’ll recall, went several extra miles in its effort to bring Tesla into the country. It didn’t work—not for lack of enthusiasm, but perhaps because there was too much of it. 

The real reason lies elsewhere: Tesla’s declining sales in several international markets and, more broadly, the slower-than-expected adoption of four-wheeler electric vehicles worldwide.

As things stand, Tesla is not setting up a manufacturing facility in India, just as The Core Report had predicted over the past several months. 

What the company has done instead is lease mid-sized showrooms in Delhi and Mumbai, along with a yard, presumably to store and service imported vehicles it plans to sell in the Indian market.

Last week, Heavy Industries Minister H.D. Kumaraswamy confirmed as much. “We’re not actually expecting from them. They’re planning to start with showrooms,” he said, while announcing the guidelines for the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI). 

But the real story was never just about Tesla’s cars or even Musk’s Starlink satellite broadband system—which, quite bizarrely, is bulldozing its way into India by piggybacking on the marketing networks of its two biggest potential rivals: Reliance Jio and Bharti Airtel.

Trump Versus Musk, And the Fallout

At the core, this was always about something else: Musk being treated as an informal extension of the Trump family, handled more gently because of what his proximity to Trump symbolised. 

And less because of the technological superiority of his products, good as they may be.

But with Trump and Musk in the middle of a verbal equivalent of a schoolboy scrap during lunch hour, where does that leave us?

The Washington Post reported on Sunday that NASA and Pentagon officials are urging competitors to quickly develop alternative rockets and spacecraft to Musk’s SpaceX, after President Donald Trump threatened to cancel SpaceX’s contracts and Musk’s defiant response.

Government officials were apparently stunned after Musk said — and later recanted — that SpaceX would stop flying its Dragon spacecraft, a move that would leave the space agency with no way to transport its astronauts to the International Space Station.

The threat has apparently alarmed officials at NASA, which entrusts SpaceX with the lives of its astronauts, and at the Pentagon, which relies heavily on the company to launch its most sensitive satellites, said the Post.

There might be legislative ways to ensure the rockets remain available to the United States should it want to deploy them, and matters may not reach that point. 

But the threat, and its implications, are clear.

Which brings us back to India’s own attempts to appease Musk.

Possibly we did not have much choice. Remember, the tariff cloud has been hanging over India ever since Trump was elected, and in the run-up to his re-election.

Trump has a different businessman-style of functioning, and his broad embrace of Musk did suggest that opening the doors to Musk’s businesses might smooth the road in the more complex political and geopolitical discussions with the US, including on trade.

What now. There are two ways this can go.

One, the Trump-Musk war moves into a zone of subdued but longer-term hostility. 

That would mean no business dealings beyond what already exists, or at the very least, not the smooth path that had existed so far.

In some ways Musk had already exited his Government role even as Tesla shareholders protested the plummeting stock price.

The other possibility is that the two will smoke the peace pipe, and things will return to something close to normal, at least in the business context.

When Business And Politics Collide

Either way, it would appear that the excessive outreach to Tesla, or Musk’s companies more broadly, will have to be tempered, if not rolled back.

India, too, will need to shift into reverse gear on the relationship, even if slowly, or let it evolve organically, so to speak. 

Arguably, it had already reached that point, though for different reasons.

Either way, a valuable lesson has been imparted, and hopefully learnt.

Mixing business, politics, and friendship—even when fleeting or inevitable—is a tricky way to approach either business or governance.

Whether in the US, in India, or in this case, across borders.

In perfect hindsight, India’s courtship of Musk was perhaps not the best way to build bridges with Trump 2.0.

In India, businessmen may exert high levels of influence in the political sphere. But they largely stay in their lane, at least in the public eye.

Because they also understand that the power of the people is something only seasoned politicians can truly harness.

The Musk-Trump episode also offers a larger lesson for the political class.

Which is that relying too much on social media, or the people who control it, for political gains or outreach is a strategy fraught with risk at multiple levels.

And one that can backfire spectacularly.

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CORE NUMBER

Rs 8,749 Crore

That’s how much foreign portfolio investors (FPIs) have pulled out from Indian equities in just the first week of June, according to Business Standard. The sharp reversal follows net inflows of Rs 19,860 crore in May and Rs 4,223 crore in April.

📉 The broader context:

• Prior FPI outflows:
  • Rs 3,973 crore in March
  • Rs 34,574 crore in February
  • Rs 78,027 crore in January
  

• Total outflows in 2025 so far: Rs 1.01 lakh crore

📉 What’s driving the selloff:

• Renewed US-China trade tensions

• Rising US bond yields pulling capital away

• A US probe into Adani Group’s alleged Iran sanctions violations denting investor confidence

HDFC Pushes Back. HDFC Bank has slammed allegations of fraud against its CEO Sashidhar Jagdishan as “baseless and malicious,” calling them a pressure tactic by loan defaulters. The claims were made by Lilavati Hospital’s trust, whose trustee Prashant Mehta allegedly owes the bank a large unpaid sum. HDFC says Mehta is misusing the legal system to delay recovery and harass its leadership. The bank has vowed legal action, asserting confidence in the judicial process to expose what it calls an attempt to intimidate and deflect. The CEO, it says, is being targeted for doing his job.

Urban India Is Buying Fewer Bikes. The sales of mid-range motorbikes — that’s bikes with a 150-200 cc — fell by 9% in FY25, and by 31% in April alone. At the same time, the sales of bikes below 150 cc grew by 6.4%, thanks to rural and first-time urban buyers. An Economic Times report says the trend mirrors the FMCG segment, where there was also a slowdown in urban demand. But, bike-makers are hopeful. The RBI has cut repo rates, making borrowing cheaper, and companies expect to release fresh models in the 150 cc - 200 cc segment, which could improve sales in the near future.

Rate Cuts Ripple Out. After the Reserve Bank of India cut its key lending rate by 0.5%, banks including Punjab National Bank, Bank of Baroda, UCO Bank, Bank of India, and private sector lender Karur Vysya Bank have reduced their loan interest rates. This means loans—home, personal, or business—could get slightly cheaper. The RBI also eased another rule, letting banks keep less cash in reserve, so they have more to lend. As Business Standard noted, this may be the last rate cut for now, so banks are quickly passing on the benefit to attract borrowers and boost credit demand in a slowing economy.

Mounjaro Takes Off in India. It’s been three months since Eli-Lilly officially launched Mounjaro, a weight loss drug similar to Ozempic, in India and it has quietly become one of the fastest growing pharmaceutical products in the country. Sales of Mounjaro grew by 60% month-on-month in May, with 5 mg injections accounting for Rs 7.53 crore. That’s because patients, most of whom are in their 30s and 40s, are upgrading their dosage from 2.5 to 5 mg. Clinical trials have shown the drug to be effective in controlling blood sugar and reducing cardiovascular events in Type 2 diabetes patients, though experts warn against its side effects.

THE SIGNAL DAILY

Inside India’s Art Market Boom

If you know anything about Indian art, you’ve probably heard of MF or Maqbool Fida Husain, one of India’s most popular modern artists. Though people compare Husain to Picasso, historically, his paintings have not fetched the prices that Picasso’s have. 

Well, that’s until now. The Indian art market is seeing its moment. From 15 crores rupees in 2000, the Indian art market is worth 3,000 crore rupees today. And, it’s only going to keep growing. Estimates say that by 2030, the market will grow to 10,000 crore rupees.

In today’s episode of The Signal Daily, we’ll learn about what’s behind these crazy numbers of the Indian art market? Are emerging artists also benefitting from this boom? Is buying art only a domain of the ultra-wealthy? 

The Core produces The Signal Daily. Follow us wherever you get your favourite podcasts. To check out the rest of our work go to www.thecore.in.

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👥 THE TEAM

✍️ Zinal Dedhia, Salman SH, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas