- Donald Trump has somewhat retracted his previous criticisms of Elon Musk.
- He suggested that Musk’s businesses would continue to benefit from federal subsidies.
- Musk countered by stating that those subsidies likely “do not exist.”
In a recent statement, President Donald Trump declared that he intends to support Elon Musk by allowing his companies to keep receiving federal subsidies so they can thrive.
However, Musk has a very different perspective.
On the same day, Musk posted on X, saying, “The ‘subsidies’ he’s talking about simply do not exist.”
He pointed out that during Trump’s tenure, numerous clean energy incentives had been either eliminated or had shortened timeframes, all while significant subsidies for oil and gas continued unchallenged.
Tesla, Musk’s electric vehicle company, is already experiencing a squeeze. Tesla announced during an earnings call that the removal of the $7,500 EV tax credit from Trump’s “One Big Beautiful Bill” would dent its sales in the US.
Vaibhav Taneja, Tesla’s CFO, commented on the “sudden change” leading to a “limited supply of vehicles this quarter.”
In his X post, Musk highlighted that SpaceX won its federal contracts fairly and that relocating SpaceX’s projects to other companies would risk leaving astronauts without support and costing taxpayers significantly more.
Despite reaching out, the White House, Tesla, and SpaceX have not replied to requests for further comments.
Worries and Market Reactions
Musk has stood in the corner of Trump during last year’s campaign and appeared to have a solid working relationship with him.
He generously supported Trump, along with other GOP candidates, putting in at least $277 million towards the 2024 elections. Following Trump’s victory, Musk held a significant position, even leading the White House DOGE office and spearheading budget cuts.
This relationship underwent a notable shift last month, with Musk and Trump increasingly at odds.
The tensions kicked off around June 5, when Musk criticized Trump’s tax bill on X, labeling it a “MOUNTAIN of DISGUSTING PORK” and claiming he played a role in Trump’s ascent to the presidency.
His post noted, “Such ingratitude.”
The verbal sparring continued shortly thereafter, as Trump suggested he might cancel Musk’s government contracts in a Truth Social post, promptly indicating this as a simple way to save on expenditures. In turn, Musk cheekily threatened to deactivate SpaceX’s Dragon spacecraft, solidly linking this to NASA missions, but soon retracted that threat.
Later, Musk expressed regret about his comments toward Trump, admitting that some of his remarks may have been overly harsh.
However, a truce did not last long. On July 1, Trump stated that DOGE should rigorously assess Musk’s enterprises after Musk hinted at starting a new political party aimed at defeating Republican lawmakers who supported Trump’s tax initiatives.
Trump remarked, “Elon may have received more subsidies than anyone else ever, and without them, he might very well be heading back to South Africa,” thus implying that without support, Musk’s ventures wouldn’t survive.
He quipped, “No more rocket launches, satellites, and electric car manufacturing, and our country would save a fortune.”
Musk, pushing back, dared Trump to cut all support immediately: “I am literally saying CUT IT ALL. Now.”
Anxious markets reacted, as Tesla’s shares plunged by 5% after Trump’s remarks. This dip has left Tesla shares down over 24% for the year.
Moreover, an examination by The Washington Post earlier this year revealed that Musk has secured approximately $38 billion in government aid, whether through contracts, loans, or tax incentives.
During Tesla’s earnings call on Wednesday, Musk indicated the firm is poised to undergo a “strange transition period where we’ll lose many incentives in the US.”
He candidly noted, “Does that mean we might hit a few tough quarters? Yeah, we likely could experience some challenging times.”
