Trump vs Musk: US President calls for review of Tesla subsidies, Tesla shares drop, Musk responds ‘CUT IT ALL'

West Australian

9 hours ago

US President Donald Trump has called for a government review of subsidies to Tesla Chief Elon Musk's companies, saying it could save taxpayers billions and escalating a high-profile feud with the richest person in the world and arguably the most powerful.
Mr Trump's comments followed renewed criticism from Mr Musk, a major Republican donor, who has attacked the administration's tax and spending bill and threatened to campaign against lawmakers who supported it. Tesla shares dropped more than six per cent in early trading as investors worried the dispute could pose new challenges for Mr Musk's business empire, especially as the electric car maker bets heavily on the rollout of robotaxis in Texas.
The US Transportation Department regulates vehicle design and will play a key role in deciding if Tesla can mass-produce robotaxis without pedals and steering wheels, while Mr Musk's rocket firm SpaceX has about $US22 billion ($A33 billion) in federal contracts.
'Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa,' Mr Trump said in a Truth Social post.
'No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!,' he said, referring to the Department of Government Efficiency.
In response, Mr Musk said on his own social media platform X, 'I am literally saying CUT IT ALL. Now.'
Mr Trump said Mr Musk was upset because he lost the EV mandate in the recent tax and spending bill and warned the Tesla CEO 'could lose a lot more than that'.
Mr Trump, speaking as he left the White House on Tuesday morning, said Mr Musk was 'very upset' because 'he's losing his EV mandate.'
'But you know, he could lose much more than that, believe me,' Trump continued. 'Elon could stand to lose a lot more.'
'We might need to have DOGE take a look at Elon,' Trump added, joking, 'DOGE is the monster that might have to come back and eat Elon—wouldn't that be something?'
Treasury Secretary Scott Bessent also pushed back on Mr Musk's criticism that the bill would balloon the deficit, saying, 'I'll take care of' the country's finances.
Mr Trump had in early June threatened to cut Mr Musk's government contracts when their relationship erupted into an all-out social media brawl over the tax-cut bill, which non-partisan analysts estimate would add about $US3 trillion to the US debt.
The rift had resulted in Tesla shares erasing $US150 billion in market value as investors feared a tougher regulatory road for the self-driving robotaxi that underpin much of the company's valuation.
The stock recovered after Mr Musk walked back some of his jabs, saying he had gone 'too far'.
'Musk cannot stop himself. He is getting on Trump's bad side again. Tesla international sales have fallen significantly and if he loses US subsidies, US sales are likely to fall as well,' said Stock Trader Network Chief Strategist Dennis Dick, who holds Tesla shares.
'Musk needs Trump, Trump does not need Musk,' he said.
Tesla sales have dropped for a sixth straight month in Sweden and Denmark in June, data on Tuesday showed, but they rose in Norway and Spain during the same month.
Analysts expect the company to report a drop in second-quarter delivery figures on Wednesday.
After weeks of relative silence, Mr Musk rejoined the debate on Saturday as the Senate took up the package, calling it 'utterly insane and destructive' in a post on X.
On Monday, Mr Musk said lawmakers who campaigned on cutting spending but backed the bill 'should hang their heads in shame!'
'And they will lose their primary next year if it is the last thing I do on this earth,' Mr Musk said.
He also called again for a new political party, saying the bill's massive spending indicated 'that we live in a one-party country - the PORKY PIG PARTY!!'
The criticism marked a dramatic shift after the billionaire spent nearly $US300 million on Mr Trump's re-election campaign and led the administration's DOGE initiative.
Mr Musk has argued that the legislation would greatly increase the country's debt and erase the savings he says he achieved through DOGE.
It remains unclear how much sway Mr Musk has over Congress or what effect his opinions might have on the bill's passage.
But Republicans have expressed concern that his on-again, off-again feud with Mr Trump could hurt their chances to protect their majority in the 2026 midterm congressional elections.
- with Reuters