KUALA LUMPUR – Former US president Donald Trump has reignited his feud with Elon Musk, threatening to cut off US federal subsidies to the billionaire’s companies – which resulted in Tesla shares slipping over 5% on Tuesday.
The clash follows Musk’s renewed criticism of Trump’s tax-and-spending bill, which passed the US Senate on Tuesday and aims to eliminate subsidies for electric vehicles, including a US$7,500 consumer tax credit that has long benefited Tesla.
“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, according to Reuters.
On Truth Social, Trump wrote that Musk “may get more subsidy than any human being in history.”
“No more rocket launches, satellites, or electric car production, and our country would save a fortune,” he posted.
CNBC reported that he also suggested the Department of Government Efficiency (DOGE), a body Musk previously led, should investigate the subsidies.
Tesla’s shares closed at US$303.45 on Tuesday, wiping out over US$50 billion in market value. According to Anadolu, the stock has fallen 11% over the past month, weighed down by Musk’s growing political friction with Trump and uncertainties around the EV tax credit.
Musk responded on X: “I am literally saying CUT IT ALL. Now.”
He also floated starting a new political party, writing, “Time for a new political party that actually cares about the people.”
When asked if he would consider deporting the South African-born billionaire, Trump said, “I don’t know. We’ll have to take a look.”
The feud could complicate Tesla’s plans to expand its robotaxi programme, which depends heavily on regulatory approval. Analysts also warn that the removal of EV subsidies could slash Tesla’s 2024 operating income by up to US$1.2 billion. Without sales of regulatory credits – which brought in nearly US$11 billion to date – Tesla would have reported a Q1 loss this year.
Gary Black, a longtime Tesla investor, said on X that Musk should have anticipated the backlash: “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.” – July 2, 2025