By Summary
-Trump suggests DOGE review Musk’s subsidies for savings
-Musk criticizes tax-cut bill, calls for a new political party
-Tesla shares drop 5.5% amid subsidy threats
-Sales of Tesla struggle worldwide as Musk bets on robotaxis
-Tesla sales figures due Wednesday
WASHINGTON, July 1 (AfrikTimes) – U.S. President Donald Trump on Tuesday threatened to cut off the billions of dollars in subsidies that Elon Musk’s companies receive from the federal government, in an escalation of the war of words between the president and the world’s richest man, one-time allies who have since fallen out.
“He’s upset that he’s losing his EV mandate and… he’s very upset about a lot of things, but he can lose a lot more than that,” Trump told reporters at the White House on Tuesday.
Elon Musk, left, was among a group of business leaders who met with Donald J. Trump at the White House in 2017.
Though Musk has often said government subsidies should be eliminated, Tesla has historically benefited from billions of dollars in tax credits and other policy benefits because of its business in clean transportation and renewable energy. The Trump administration has control over many of those programs, some of which are targeted in the tax bill, including a $7,500 consumer tax credit that has made buying or leasing EVs more attractive for consumers.
Tesla shares dropped more than 5.5% Tuesday.
Treasury Secretary Scott Bessent pushed back on Musk’s criticism that the bill would balloon the deficit, saying, “I’ll take care of” the country’s finances.
Bessent testifies before the Senate Finance Committee during his confirmation hearing for Treasury Secretary in the Dirksen Senate Office Building in Washington, D.C., on Jan. 16, 2025.
Musk spearheaded the Department of Government Efficiency (DOGE), a short-lived initiative aimed at cutting government spending, before he pulled back his involvement in late May. Trump on Truth Social on Tuesday suggested Musk might receive more subsidies “than any human being in history, by far,” adding: “No more rocket launches, satellites, or electric car production, and our country would save a FORTUNE.”
In response to Trump’s threats, Musk said on his own social media platform X, “I am literally saying CUT IT ALL. Now.” He later added that he could escalate the exchange with Trump but said, “I will refrain for now.”
CHALLENGES TO TESLA
Tesla shares fall after hitting record high post-election.
“The substance of Tesla’s valuation right now is based on progress towards autonomy. I don’t think anything is going to happen on that front, but that is the risk,” said Gene Munster, managing partner at Tesla investor Deepwater Asset Management.
Gary Black, a longtime Tesla investor who manages money for the Future Fund LLC, sold his shares recently as car sales declined. He told Reuters he is considering when to reinvest and that eliminating electric vehicle credits would harm Tesla. In a separate post on X, Black said: “Not sure why @elonmusk didn’t see this coming as a result of him speaking out against passage of President Trump’s big, beautiful bill.”
A Tesla Cybertruck is displayed inside a showroom at The Florida Mall on May 13, 2025, in Orlando, Florida.
Tesla’s future is also closely tied to decisions made by the U.S. Department of Transportation, which regulates vehicle design and will play a key role in determining whether the company can mass-produce robotaxis without traditional components such as pedals and steering wheels.
Meanwhile, Musk’s rocket company, SpaceX, has about $22 billion in federal contracts. Tesla also gets regulatory credits for selling electric vehicles and has generated nearly $11 billion by selling those credits to other automakers that are unable to meet increasingly stringent vehicle emissions standards. Without those credit sales, the company would have reported a first-quarter loss in April.
Trump had in early June threatened to cut Musk’s government contracts when their relationship erupted into an all-out social media brawl over the tax-cut bill, which non-partisan analysts estimate would add about $3 trillion to the U.S. debt.
President Donald Trump speaks during a news conference with Elon Musk in the Oval Office of the White House on Friday, May 30, 2025, in Washington.
The subsequent selloff in Tesla shares erased $150 billion in market value, though the stock recovered after Musk walked back some of his comments. However, the truce was short-lived. On Saturday, Musk criticized the bill, calling it “utterly insane and destructive” in a post on X. He said lawmakers who voted for the bill after campaigning on cutting spending “will lose their primary next year if it is the last thing I do on this Earth.”
“Musk cannot stop himself. He’s getting on Trump’s bad side again,” said Dennis Dick, chief strategist at Stock Trader Network and a Tesla shareholder. “Tesla’s international sales have already taken a hit, and if he loses U.S. subsidies, domestic sales are likely to decline as well. Musk needs Trump, Trump doesn’t need Musk.”
