Trump claims he's not after Musk's companies as EV subsidies disappear

Time of India

25-07-2025

US President
Donald Trump
has rejected growing speculation that he's targeting
Elon Musk
's companies out of political spite, denying any intention to strip them of government support.
'Everyone is stating that I will destroy Elon's companies by taking away some, if not all, of the large scale subsidies he receives from the
US Government
,' Trump said on Truth Social. 'This is not so! I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before!'
He continued, 'The better they do, the better the USA does, and that's good for all of us. We are setting records every day, and I want to keep it that way!'
His comments followed renewed media attention on the growing rift between the two, sparked by
Musk
's opposition to a key
White House
economic bill.
Fallout from the 'One Big Beautiful Bill'
Tensions escalated after Musk publicly criticised Trump's flagship tax and spending legislation, formally known as the 'One Big Beautiful Bill Act' (OBBBA). The bill, which came into effect on 4 July, scaled back several clean energy incentives and lifted penalties on carmakers that failed to meet fuel efficiency standards.
Musk, who had once chaired Trump's Department of Government Efficiency, openly broke ranks. In response, Trump reportedly considered reviewing and potentially cutting government contracts with Musk's companies.
This shift marked a dramatic change in tone. Musk had previously donated heavily to Trump's re-election effort and played a key advisory role within his administration.
Tesla stock dips after grim forecast
Tesla's financial outlook has added fuel to the fire. On Wednesday 24 July, the company warned of difficult months ahead. Speaking during the second-quarter earnings call, Musk said, 'We probably could have a few rough quarters.'
The warning came as Tesla posted disappointing revenue numbers. Its stock dropped by 8.2 percent in New York trading that day, continuing a broader 24 percent decline for the year.
Tesla Chief Financial Officer Vaibhav Taneja added more detail on the company's earnings call. He said the OBBBA has 'certain adverse impacts' on Tesla's energy business, especially in residential storage. He warned of a dip in both demand and profit as consumer tax credits expired early.
Taneja also revealed that new tariffs had already raised costs by around 300 million dollars in the second quarter alone, with further increases expected later this year.
In a regulatory filing, Tesla directly referenced the impact of the new law, stating, 'The loss of previously available tax credits and carbon offset mechanisms may further negatively impact our financial results.' It also warned that OBBBA provisions 'could affect battery cell expenses and impact costs for our consumers, negatively impacting demand.'
Musk rejects claims of relying on subsidies
Responding to Trump's remarks, Musk pushed back strongly. On Thursday, he wrote on X, 'The 'subsidies' he's talking about simply do not exist. DJT has already removed or put an expiry date on all sustainable energy support while leaving massive oil & gas subsidies untouched.'
Musk's frustration reflects a broader shift in US federal support for clean energy. Since 2015, Tesla has made over 12 billion dollars from regulatory credit sales, according to FedScout. In the most recent quarter alone, it earned 439 million dollars from these credits, which are part of a system that allows automakers to buy environmental offsets.
These incentives have been a key source of revenue, especially as Tesla ramps up investments in autonomous vehicles and next-generation battery tech.
Strained ties beyond policy
The breakdown between Trump and Musk isn't just about legislation. It turned personal. At the height of the feud, Musk posted and later deleted a claim that Trump's name appeared in files related to Jeffrey Epstein, the disgraced financier and sex offender.
The post sparked outrage within Trump's circle and among his supporters. The situation escalated further after The
Wall Street Journal
reported that Attorney General Pam Bondi had told the president his name was among those in the Epstein files, alongside 'many other high-profile figures.'
A Republican-led House committee has now subpoenaed Ghislaine Maxwell, Epstein's convicted accomplice, to testify next month. Trump's team has dismissed the Epstein allegations outright.
'This is nothing more than a continuation of the fake news stories concocted by the Democrats and the liberal media,'
White House Communications
Director Steven Cheung said.
SpaceX, xAI also under scrutiny
While Tesla grabs headlines, Musk's other ventures haven't been spared. SpaceX, his aerospace firm, has secured more than 22 billion dollars in US government contracts since 2008. These include key deals with NASA, the Air Force, and Space Force.
Following the fallout, the Trump administration ordered a review of SpaceX's contracts. Most were deemed essential and allowed to continue.
Despite a brief threat from Musk to pull the Dragon spacecraft used by NASA for space station missions, operations resumed. Musk later clarified, 'SpaceX won the NASA contracts by doing a better job for less money.'
Meanwhile, his AI startup xAI is also drawing government attention. Earlier this month, the
Pentagon
announced that xAI and three other firms had been awarded contracts worth up to 200 million dollars each. But White House Press Secretary Karoline Leavitt indicated that the administration is hesitant about federal agencies collaborating further with Musk's AI projects.
Trump and Musk made some effort to dial down hostilities after their public clashes, but the damage is done. Musk's businesses are now navigating policy shifts, rising costs, and political risk, all while investors grow nervous.
The relationship between the billionaire entrepreneur and the president he once backed now appears beyond repair. And with both eyeing future influence — one in the tech sphere, the other in the political arena — this uneasy standoff may still have more chapters to come.