U.S. President Donald Trump took a strong stance on Monday against Elon Musk’s companies, threatening to cut off the substantial federal subsidies that support them. This escalation in their public feud comes as Musk, once a close ally of Trump, renewed his criticism of a tax-cut and spending bill that aims to eliminate subsidies for electric vehicle purchases, which have significantly benefited Tesla.
Musk’s criticism followed the Senate’s narrow approval of the bill, which Trump praised during a press briefing. He indicated that Musk is upset about potentially losing his electric vehicle mandate and any related subsidies, referring to him as someone who could “lose a lot more than that.” Despite Musk’s long-standing advocacy for the elimination of government subsidies, his companies have historically relied on billions in tax benefits linked to clean energy and electric vehicles. The removal of the $7,500 consumer tax credit, which has been instrumental in making EVs more accessible, could dramatically impact Tesla’s sales and profits.
Tesla’s shares plummeted over 5% following Trump’s remarks. Musk has also suggested he may establish a new political party and challenge lawmakers who support the tax bill, raising concerns among Republicans about the impact on their prospects in the upcoming 2026 midterm elections.
Further complicating matters, Musk’s management of the Department of Government Efficiency (DOGE), aimed at reducing government waste, came under scrutiny. Trump asserted that Musk might be receiving more subsidies than anyone else in history, implying that without these government supports, significant sectors of Musk’s enterprises—like rocket launches and electric vehicle production—could be jeopardized.
Responding to Trump’s threats, Musk proclaimed on his platform, X, that he endorses cutting all subsidies immediately. Analysts note that the evolving dynamic between Musk and Trump raises questions about Tesla’s future, especially with the company’s ongoing challenges in achieving its ambitious robotaxi program amid regulatory uncertainty.
The ongoing battle between these two high-profile figures reflects deeper conflicts within the Republican Party concerning fiscal policy and government spending, underlining the legislative stakes that not only influence their relationship but also the broader political landscape.
This tumultuous scenario suggests that the ongoing exchanges may prompt a reconsideration of fiscal policies that affect innovation and sustainability. Amidst the volatility, there remains hope that constructive discussions around fiscal responsibility could lead to policies supportive of both financial oversight and technological progress in the energy sector.
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