Tesla stock sinks as Trump threatens to cut subsidies across Musk's sprawling empire
"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," Trump wrote on his social media platform, Truth Social, early Tuesday.
"No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE," Trump added. "Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!"
Read more about Tesla's stock moves and today's market action.
The threats followed Musk's criticism of Trump's "big, beautiful" tax and spending bill over the weekend after the Senate advanced it with last-minute changes that would eliminate electric vehicle tax credits — which benefit Tesla customers — earlier than expected and add $1 trillion to the bill's original price tag.
The megabill was passed by the Senate on Tuesday, bringing it one step closer to becoming law. Its provision ending the EV credit would cut an estimated $1.2 billion from Tesla's annual profit.
Meanwhile, SpaceX has received more than $21 billion in federal contracts, according to US spending data.
In one of his series of posts on his own platform, X, Musk called the bill "utterly insane and destructive [with] handouts to industries of the past while severely damaging industries of the future." Musk's critiques continued into the trading week, with the tech mogul proposing the formation of a new political party for the second time last month.
Tesla shares dropped 1.9% Monday as the Senate began voting on amendments to the bill in what's called a vote-a-rama, which dragged into Tuesday morning.
Late Monday night, Musk posted an AI-generated image of Pinocchio with the word 'liar' stamped across it, writing: 'Anyone who campaigned on the PROMISE of REDUCING SPENDING , but continues to vote on the BIGGEST DEBT ceiling increase in HISTORY will see their face on this poster in the primary next year.'
Trump's Truth Social post threatening subsidies on Musk's empire followed just a few hours later.
'Elon Musk knew, long before he so strongly Endorsed me for President, that I was strongly against the EV Mandate,' the president wrote.
The barbs revived a feud between the world's two most powerful men in early June that erased more than $150 billion in value from Tesla in a single day.
Those exchanges last month saw Trump and Musk trade a wide array of insults on social media, exposing the risk of the electric vehicle stock's "Musk premium."
Musk has been highly critical of Trump's "big, beautiful" bill since he left his role in D.C. running the newly created federal agency DOGE, the Department of Government Efficiency, which aimed but ultimately failed to eliminate government debt with highly controversial spending cuts.
'The jabs between Musk and Trump will continue as the Budget rolls through Congress but Tesla investors want Musk to focus on driving Tesla and stop this political angle ... which has turned into a life of its own in a roller coaster ride since the November elections,' Wedbush analyst Dan Ives wrote in a note to clients Tuesday morning.
'At the end of the day being on Trump's bad side will not turn out well ... and Musk knows this and Tesla investors want this back and forth to end,' Ives wrote.
Also driving Tesla shares down Tuesday, fresh data showed Tesla's sales dropped for the sixth straight month in Sweden and Denmark in June. The company is set to report overall global deliveries on Wednesday. Wall Street expects deliveries to slide 11% from the prior year.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
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