The truce between Elon Musk and US President Donald Trump didn’t even last a month.
On Monday night (late Tuesday AEST), Trump responded by suggesting that his administration might investigate the government subsidies received by Musk’s companies.
While SpaceX heavily relies on government contracts for its revenue, Tesla has less dependence on government contracts. However, various federal policies impact Tesla’s finances, such as the $7500 tax credit for electric vehicle purchasers that enables Tesla and other car manufacturers to increase prices. This tax credit has also positively influenced EV sales, possibly providing Tesla with billions in value just last year.
Additionally, Tesla disclosed that it generated over $8 billion in revenue from selling regulatory credits to other carmakers over six years to aid in their compliance with federal and state emission regulations. Trump supports reducing these standards and revoking states’ authority to establish their emission rules, thereby jeopardizing the market for such credit sales.
The loss of the EV tax credit could cost Tesla $1.2 billion a year and the loss of regulatory credit sales another $2 billion, according to JPMorgan.
“At the end of the day being on Trump’s bad side will not turn out well, and Musk knows this,” Ives wrote.
Trump has argued that Musk’s primary opposition to the Big, Beautiful Bill is the loss of EV tax credits. Musk denies that, retweeting a post Monday that said, “Elon’s opposition to the ‘One Big Beautiful Bill’ has never been about its removal of EV tax credits or the EV mandate, it’s simply about his passionate opposition to rising government debt.”
“All I’m asking is that we don’t bankrupt America,” Musk posted.
It’s unclear whether Musk’s threats will kill the bill’s chances. Trump has mounted a massive pressure campaign on holdouts, putting members of Congress in a difficult position of choosing Musk and his war chest of cash over Trump and his bully pulpit.
Musk spent more than $275 million to support Trump and other Republican candidates in the 2024 election. According to Federal Election Commission filings, Musk’s political action committee, America PAC, last gave money in March to support two Republican candidates running in special elections in Florida — Randy Fine and Jimmy Patronis. In late May he said in an interview he was planning to cut back on political spending, saying he has “done enough.”
But Musk has the resources to make good on his promises to support a slate of alternate candidates if he chooses.
That doesn’t guarantee he’ll succeed: Musk spent considerable time and resources in a losing effort to elect a Republican to Wisconsin’s supreme court earlier this year. His popularity remains low, and, ultimately, Donald Trump is president, and Musk is not.
