Cathie Wood Warned About Trump-Musk Clash Long Before It Exploded — Now Says The Feud Exposes Just How Dependent Elon's Empire Is On The US Government - Tesla (NASDAQ:TSLA)

Long before the conflict between President Donald Trump and Tesla Inc. TSLA CEO Elon Musk erupted in full public view, ARK Invest CEO Cathie Wood had shed light on the risks of clashing personalities.

Amidst the ongoing feud, which was sparked by Musk's criticism of Trump's "big, beautiful bill," Wood has highlighted a more profound concern: the deep dependence of Musk's companies on government support.

What Happened: In a video posted to ARK Invest's YouTube channel on Friday, Wood said, "I think the way this is evolving is Elon, Tesla, and investors are beginning to understand more and more just how much the government has control here."

“Elon is involved in companies that are depending on the government,” she added, referring to Tesla, SpaceX, and Neuralink. These companies operate under federal oversight or reap benefits from public funding.

SpaceX holds $22 billion in federal contracts, according to company COO Gwynne Shotwell. Neuralink, meanwhile, is strictly regulated by the FDA.

Tesla, whose stock fell by 14% last week as the feud escalated, would face hurdles in its robotaxi rollout in a hostile regulatory landscape. Trump has hinted at canceling contracts in the wake of their feud.

Why It Matters: In 2024, Wood was asked how a falling out between Trump and Musk might impact companies like Tesla and SpaceX. She had acknowledged the potential risk of their strong personalities colliding with each other, but also highlighted their shared ambitions for the future of the country.

"Well I think that if you look at Elon Musk's companies, what they're doing is taking us into this new age, whether it's Tesla with autonomous mobility and robotaxis or SpaceX, really getting us to the moon again and then to Mars. I think these are things that President Trump wants," she said.

To manage tensions should they arise, Wood had recommended a long-term approach: "They have — they're going to keep their eye on the prize, which is really trying to use these technologies to transform not only transportation but I think in particular healthcare."

In the current situation, Wood observes that the feud may be part of a larger shift. "One of the hypotheses out there is that what has happened was partly — not entirely — orchestrated," she said.

"Clearly, there has been some brand damage to Tesla, which he readily admits, and I think he’s trying to disengage from the government and being associated with one party or the other."

Wood is still confident about Musk's ability to adapt. "He works really well under pressure," she said. "He creates a lot of that chaos and pressure himself."

Price Action: At the time of writing, Tesla shares were down 2.39% pre-market at $288.10, according to Benzinga Pro.

Tesla ranks high in Momentum, Quality, and Growth, but falls short on Value. For deeper stock analysis, explore Benzinga Edge Stock Rankings today.