Washington, July 1: In an intensified verbal sparring match between the president and the richest man in the world, who were once allies but have since drifted apart, U.S. President Donald Trump threatened on Tuesday to stop the billions of dollars in federal subsidies that Elon Musk’s businesses receive.
Musk, who invested hundreds of millions in Trump’s reelection, redoubled his criticism of Trump’s tax-cut and spending bill on Monday, claiming that it would remove subsidies for the purchase of electric vehicles, which have benefited Tesla, the top U.S. EV manufacturer. By noon on Tuesday, that bill narrowly passed the Senate.
Trump told reporters at the White House on Tuesday, “He’s upset that he’s losing his EV mandate and … he’s very upset about things but he can lose a lot more than that.”
Tesla has historically benefited from billions of dollars in tax credits and other policy benefits due to its business in clean transportation and renewable energy, despite Musk’s frequent calls for the elimination of government subsidies. Many of those programs are under the Trump administration’s control, and the tax bill targets some of them, such as a $7,500 consumer tax credit that has increased consumer interest in purchasing or leasing EVs.
On Tuesday, Tesla’s stock fell more than 5%.
Despite running on a platform of cutting government spending, the CEO of Tesla reiterated threats to launch a new political party and spend money to unseat lawmakers who support the tax bill. Republicans are worried that Musk’s intermittent conflict with Trump may make it more difficult for them to hold onto their majority in the 2026 midterm elections.
“I’ll take care of” the nation’s finances, Treasury Secretary Scott Bessent said in response to Musk’s criticism that the bill would cause the deficit to skyrocket.
Before he withdrew his involvement in late May, Musk led the Department of Government Efficiency (DOGE), which was created to reduce government spending. Musk may receive more subsidies “than any human being in history, by far,” Trump said on Tuesday’s Truth Social, adding, “No more rocket launches, satellites, or electric car production, and our Country would save a FORTUNE.”
Later, Trump redoubled his efforts, smiling as he told reporters, “DOGE is the monster that might have to go back and eat Elon.”
On his own social media platform, X, Musk responded to Trump’s threats by writing, “I am literally saying CUT IT ALL. “Now.” He went on to say that he could intensify his conversation with Trump, but “I will refrain for now.”
