The tense relationship between former allies
Donald Trump
and Elon Musk escalated again this week, but the former president is pushing back against claims that he intends to sabotage Musk’s business empire.
Speaking Thursday, Trump denied accusations that he plans to cut federal support for Musk’s companies, despite previously threatening to eliminate billions in government subsidies. “Everyone is saying I’ll destroy Elon’s companies by cutting subsidies. Not true!” Trump wrote on Truth Social. “I want Elon—and all businesses in the U.S.—to thrive like never before. The better they do, the better the country does.”
Trump vs. Musk: A Breakdown of the Rift
The once cordial
relationship
between the Tesla and SpaceX CEO and the U.S. President has soured in recent weeks, largely due to Musk’s public break with the Department of Government Efficiency (DOGE) and his criticism of Trump’s signature legislative package, dubbed the “Big Beautiful Bill.”
That bill, recently passed by the Senate, would phase out incentives for electric vehicle purchases—benefits that have played a key role in Tesla’s success. In response, Trump reportedly told reporters, “He [Musk] is very upset about losing his EV mandate… but he can lose a lot more than that.”
Tesla shares dropped nearly 8% on Thursday, closing at $307.05, amid mounting investor anxiety over the feud and the future of federal EV subsidies.
Musk Strikes Back: Political Ambitions and a New Party
Musk hasn’t
stayed
silent. In the wake of Trump’s threats, the billionaire hinted at launching a new political movement and days later unveiled the “American Party”—a platform he claims is focused on restoring freedom and innovation in the U.S.
Musk has also pledged millions to oppose lawmakers backing the bill, signaling a more direct political engagement that could complicate Republican efforts to retain control of Congress in the 2026 midterms.
What’s at Stake for Musk?
While Musk has
repeatedly
said that government subsidies should be eliminated, his companies have reaped billions in federal aid. Tesla alone has earned nearly $11 billion from regulatory credits, selling them to automakers that can’t meet emissions standards. The company also benefits from the $7,500 EV tax credit, which is now under threat.
SpaceX, Musk’s aerospace venture, currently holds around $22 billion in government contracts, making federal policy critical to its continued growth.
Perhaps most vulnerable is Tesla’s upcoming robotaxi project, which relies on approval from the U.S. Transportation Department to launch autonomous vehicles without steering wheels or pedals. If blocked, it could stall what Musk sees as Tesla’s next major revenue stream.
Republican Concerns and Political Fallout
The feud has already rattled
Republican
strategists. Some fear that a high-profile split between Trump and Musk—once one of his top supporters—could alienate tech-minded voters and major donors heading into 2026.
Meanwhile, Treasury Secretary Scott Bessent defended the administration’s policy shifts, saying of Musk’s criticism: “I’ll take care of the country’s finances.”
As the war of words continues, observers say the clash between two of the country’s most powerful figures could have far-reaching implications for tech regulation, the clean energy economy, and the 2026 elections.
