If you want to kill competition in an industry, tax it enough that only the large corporations can survive the loss, and add some complicated regulations in for extra effect.
The notion that this is about helping SpaceX kill off their competition is absurd.
This is Musk Derangement Syndrome. The Brandon administration is simply trying think of every way to go after Musk. He pissed them off. He dismantled the branch office of Pravda that the old Twitter was building for The Blob. He fired all of the CIA and FBI spooks on Twitter's payroll, who were busy censoring and shadowbanning anyone who was engaing in wrongspeech. But the worst of it: he has all but explicitly endorsed Trump. Just read his tweets. He's been fully red-pilled. Not a day goes by that he doesn't rag on all of the left's sacred cows: environmentalism, transgenderisms, the illegal alien invasion from all the South American shitholes, et. al.
This is why they're doing this. This is why they have a bunch of lawsuits going against Tesla, for a bunch of bullshit reasons. This is why every time the Brandon administration tries to puff up the US's fledging EV industry they always fluff only Detroit's automakers, and conspicuously ignoring the elephant in the room.
And this is why they're doing this, that's all.