Donald Trump, Elon Musk Engage in Heated Exchange, Threats over Tesla Subsidies, Spending Bill
- Donald Trump and Elon Musk’s feud escalated into public hostility this week, with threats over several issues, including Musk’s US citizenship
- The clash came after Musk criticised Trump’s newly passed tax and spending bill, which phases out crucial subsidies
- Trump responded by threatening to cut off billions in government contracts for Tesla and SpaceX
Elijah Ntongai, an editor at TUKO.co.ke, has over four years of financial, business, and technology research and reporting experience, providing insights into Kenyan, African, and global trends.
The feud between US President Donald Trump and Tesla CEO Elon Musk erupted into open hostility this week.
Source: Getty Images
The billionaires' feud evolved into threats flying over billions in federal subsidies, electric vehicle (EV) mandates, and even Musk's US citizenship.
The feud, which has roiled markets and shaken political alliances, came as Musk ramped up criticism of Trump's recently passed spending and tax-cut bill.
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The legislation, which was narrowly cleared by the Senate on Tuesday, phases out subsidies for EVs, a move that could cost Tesla up to $1.2 billion, according to J.P. Morgan analysts.
In response to Musk's criticism, President Trump lashed out, accusing Musk of hypocrisy and warning that his government could revoke billions in subsidies and contracts tied to Tesla and SpaceX.
Speaking from the White House, Trump declared, “He’s upset he’s losing his EV mandate… but he can lose a lot more than that.”
Trump further escalated the rhetoric on his Truth Social platform, posting:
“No more rocket launches, satellites, or electric car production — and our country would save a fortune.”
Speaking at the White House Trump also joked that the Department of Government Efficiency (DOGE), which was once led by Musk, might have to “go back and eat Elon” when he was asked about deportation.
"We might have to put DOGE on Elon. You know what DOGE is? DOGE is the monster that might have to go back and eat Elon," Trump said.
Musk, never one to back down, fired back on X (formerly Twitter):
“I am literally saying CUT IT ALL. Now. I will refrain for now (from attacking Trump),” hinting at further fallout to come.
Tesla shares drop
Tesla shares dropped about 5.5% on Tuesday following the escalating tensions between Trump and Musk.
Tesla’s global sales have already been slowing, and its controversial robotaxi project, which is central to its future growth, depends on federal and state regulatory support.
The EV sector at large felt the heat. Shares in Rivian and Lucid Motors slid 2% and 3.8%, respectively. Meanwhile, the Electrification Coalition, an EV advocacy group, urged lawmakers in the House to revise the bill.
Source: Getty Images
Once close allies, Trump and Musk had forged a strong bond during the 2024 campaign, with Musk donating heavily to Trump’s re-election and even briefly leading the newly created DOGE agency focused on trimming government waste.
But tensions flared in May, when Musk began voicing strong opposition to Trump’s “One Big Beautiful Bill,” which Musk said betrayed America’s clean energy ambitions.
He has since floated forming a new political party dubbed the “America Party” to challenge what he sees as a broken two-party system.
US dollar performance
In other news, the US dollar has continued its downward trend into the second half of 2025, weakening by over 10% in the first six months of 2025.
Despite a rebound in stock markets and President Trump easing some tariff threats, investor confidence in the dollar remains shaken due to aggressive trade policies, rising US government debt, and geopolitical tensions.
The dollar index, which peaked at 109 in January following Trump’s re-election, has now fallen below 100, reflecting global scepticism over America’s economic direction.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
