- President Trump suggested slashing subsidies to Elon Musk-owned businesses on social media.
- Musk continued criticizing the Trump spending bill, while testing public sentiment for new political party.
- The relationship between the two billionaires has eroded since Musk left Trump's inner circle in May.
President Donald Trump took to social media Monday night to lambast Elon Musk in a continuing, and very public, dissolution of the once close relationship between the two billionaires in a split fueled by Musk’s criticism of the president’s massive tax and spending bill currently before Congress.
In a late-night posting on Truth Social, Trump suggested the Department of Government Efficiency, previously headed by Musk, could put a new focus on addressing public subsidies to Musk-owned businesses like Tesla, SpaceX and Starlink. In his so-called “big, beautiful bill”, Trump is already proposing to phase out a long-running federal tax credit for electric vehicles.
“Elon Musk knew, long before he so strongly Endorsed me for President, that I was strongly against the EV Mandate,” Trump wrote. “It is ridiculous, and was always a major part of my campaign. Electric cars are fine, but not everyone should be forced to own one.
“Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!”
Tesla stock was down 5% as of midday on Tuesday.
Since a chummy Oval Office sendoff in late May that marked the end of Musk’s tenure as the de facto head of the Trump-created Department of Government Efficiency, Musk has leveled a series of criticisms at Trump’s spending bill, which in its current form will add $3.3 trillion to the federal deficit according to the latest assessment from the non-partisan Congressional Budget Office.
In his own late night social media posting Monday, Musk responded to Trump’s threat, writing on X, “I am literally saying CUT IT ALL. Now.”
A new political party?
Musk also posted a poll on X asking his followers if it was “time to create a new political party in America that actually represents the 80% in the middle?”
Trump has previously suggested, in another Truth Social post, that the “easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.” Those contracts include tens of billions of dollars for SpaceX services and spacecraft development related to the International Space Station and various NASA efforts, including the Artemis program aiming to put U.S. astronauts back on the moon in 2027.
Failure to launch
A cancellation of its U.S. federal government contracts, should it come to fruition, would have massive financial consequences for SpaceX, the space vehicle development company Musk launched in 2002.
SpaceX president and COO Gwynne Shotwell has said the company currently has about $22 billion in federal government contracts with a variety of agencies.
Easily the biggest majority of that value, around $15 billion, is with NASA, where SpaceX provides transport services, via its Dragon spacecraft, for both cargo and astronauts to and from the ISS. The company also provides launch services for classified satellites and other payloads to the Defense Department, according to Reuters. It is also the contractor for a variety of services related to the upcoming decommissioning of the ISS in 2030.
Tesla unplugged?
While Tesla benefits from various state and federal subsidy programs, including the $7,500 federal electric vehicle credit that is slated to be phased out in Trump’s current budget proposal, the harms that have befallen the Musk-owned automaker of late are more personal in nature and were well in play before the meltdown of his relationship with the president.
The end of federal programs aimed at growing the EV sector would not damage Tesla as severely as other problems the automaker is confronting, John Helveston, a professor at George Washington University who studies the electric vehicle industry, told NPR last month.
“Musk hasn’t done Tesla any favors by taking extremely unpopular actions in his time at DOGE, and globally the business is struggling from other decisions, like focusing on the Cybertruck instead of releasing more new practical models that consumers actually want,” Helveston said. “In the European Union, sales are down heavily from the political damage, and sales in China are down from intense competition of very competitive Chinese EVs.”
Tesla sales volumes, and stock prices, have been trending downward since the start of the year and as of midday Tuesday, Tesla stock had lost over 20% of its value.
Tesla’s stock value had an incredible ride in 2024, gaining over 80% over the course of the year, with most of that price ascension realized after Trump won reelection.
Industry watchers say that post-election bump was driven in large part by investor confidence that Musk’s massive financial support of Trump, with campaign contributions reportedly north of $270 million, and subsequent appointment to lead DOGE, would bode well for Tesla’s future performance as the CEO joined the president’s inner circle.