Amidst the rising tensions between Elon Musk and Donald Trump, new drama has been unfolding in the White House, as once alleged friends and buddies, have turned sour in the present day.
U.S. President Donald Trump on July 1 in his press address threatened to cut off the billions of dollars in subsidies that Elon Musk’s companies receive from the US federal government, in an escalation of the war of words between the incumbent president and the world’s richest man, one-time allies who have since fallen out.
The feud reignited on Monday when Musk, who spent multiple millions on Trump’s re-election, renewed his criticism of Trump’s tax-cut and spending bill, which would eliminate the existing subsidies for electric vehicle purchases that have benefited Tesla, the leading U.S. EV maker.
That bill passed the US Senate by a narrow margin on Tuesday, July 1. In addition, Trump has suggested DOGE (Department of Government Efficiency) conduct a fair review of Musk’s subsidies for savings, to check for the actual figures and benefits received until now. Interestingly, Elon Musk himself was a part of the DOGE, appointed by Donald Trump himself, until the public fallout took place.
“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,” Trump told reporters at the White House on Tuesday, as per a Reuters report.
Though Musk has often said that US 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 such programs, some of which are targeted in the tax bill, including a $7500 consumer tax credit that has made buying or leasing EVs more attractive for consumers.
With this spat, and the implementation of the tax-cut bill, Tesla’s shares dropped more than 5% a day prior. Tensions rose further when Musk blasted what Trump calls his “One big, beautiful bill” as an absurd concept, that does not appeal to his sensibilities at all.
The Tesla & SpaceX CEO Elon Musk renewed threats to start a new political party and spend money to unseat lawmakers who support the tax bill, despite campaigning on limiting government spending. Republicans have expressed concern that Musk’s on-again, off-again feud with Trump could dampen their potential to protect their majority in the 2026 mid-term congressional elections.
CHALLENGES FOR MUSK & TESLA
The feud could create new challenges for Musk’s business empire, particularly as the electric automaker. His primary source of wealth bets heavily on the success of its robotaxi program currently being tested in Austin, Texas. The speed of Tesla’s robotaxi expansion depends heavily on US state and federal regulation of self-driving vehicles.
The U.S. Transportation Department is the apex body that regulates vehicle design and will play a key role in deciding if Tesla can mass-produce robotaxis without pedals and steering wheels, while Musk’s rocket firm SpaceX has about $22 billion in federal contracts.
Helene Elliott is the senior reporter for News Raise. She covers Science news. She also has a keen interest in photojournalism. Helene holds a nomination for the prestigious Red Smith Award. She is married to author Dennis D’Agostino, a former publicist with the New York Mets.
