Last week, Elon Musk’s Starlink internet service was installed at the White House. A week before that, Donald Trump promoted Tesla on the White House front lawn, after rallying people to buy the company’s cars and stock.
The Trump administration’s endorsements of Musk’s companies are attracting growing scrutiny. Critics argue that they’re breaking laws and threatening democracy. For the world’s richest man, the relationship is also causing business problems.
One involves Italy’s plans for Starlink. The country has halted talks for a proposed €1.5bn contract with the service, defence minister Guido Crosetto said in an interview Saturday.
“Everything has come to a standstill, partly because the topic has shifted from Starlink to statements by and about the person [Musk],” said the minister.
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It’s the latest development in a hot debate among Italian politicians over encrypted satellite communication services for officials in high-risk areas. Lawmakers are divided between choosing Starlink or a rival provider, such as French firm Eutelsat.
Prime Minister Giorgia Meloni’s government has considered using Starlink for a while now. However, opposition parties have warned against relying on Musk’s firm — a concern heightened by reports last month that the US may cut Ukraine off from Starlink if a minerals deal is not reached.
Musk refuted those claims. Nonetheless, his control over Ukraine’s connectivity has caused growing alarm. It forms part of a broader discussion in Italy and Europe about reducing reliance on non-European tech for critical infrastructure.
Politics meets business for Musk
Question marks over Starlink mark one of a succession of setbacks for Musk, whose role in the Trump administration and open support of far-right politicians has sparked a global backlash, with Tesla bearing the brunt.
European sales of Teslas plummeted 58% in the first two months of this year. Analysts have attributed the nosedive in part to Musk’s association with the White House and his embrace of MAGA politics.
“There is no doubt that ‘the Musk factor’ has influenced Tesla’s sales in the same way as his reputation impacted Twitter when he bought it and rebranded it as X,” Andrew Fellows, an automotive industry expert at Star, a global tech consultancy, previously told TNW.
Tesla stock has fallen 40% since January. But people aren’t just voting with their wallets — there have also been widespread protests against the EV brand.
Tesla’s dealerships have been vandalised. Cars have been burnt and charging stations petrol-bombed. In one of the more dramatic expressions of outrage, political campaigners beamed an image of Musk making a Nazi-like salute alongside the word “Heil” onto Tesla’s gigafactory in Berlin.