Trump vs. Musk: Billionaire Showdown Threatens Tesla’s Federal Support
- Edition Sona Times
- Jul 1
- 2 min read
What began as a disagreement over economic policy has escalated into a full-blown clash between two of the most powerful figures in America. Former President and 2024 GOP frontrunner Donald Trump is now threatening to cut federal subsidies and contracts to Elon Musk’s companies—particularly Tesla—after Musk publicly criticized Trump’s proposed spending and tax bill.
Allies Turn Rivals
Elon Musk, once seen as an informal Republican ally, took to his platform X to slam Trump’s “One Big Beautiful Bill,” calling it “irresponsible” and warning that it would “explode the national debt.” Musk went even further, suggesting the creation of a third political party—the “America Party”—to challenge both Democrats and establishment Republicans.
Trump responded with fury on Truth Social, accusing Musk of benefiting from massive government handouts:
“Elon Musk has received more subsidy than any human being in history. Without them, he’d probably have to close shop and head back to South Africa.”
He added that he would use his newly proposed Department of Government Efficiency (DOGE) to review—and potentially eliminate—all federal support directed toward Musk’s businesses.
Markets React Swiftly
Tesla shares plunged 6–8% in premarket trading, as Wall Street digested the possibility of Tesla losing access to government tax incentives, including the $7,500 federal EV credit. This sharp drop adds to the company’s 20% stock decline year-to-date, driven by weakening EV demand and now, deepening political entanglements.
The implications go beyond Tesla. Musk’s SpaceX, which holds more than $22 billion in U.S. government contracts, may also face scrutiny if Trump’s threats materialize.
Musk Fires Back: “Cut It All”
Rather than backing down, Musk doubled down. In a bold response posted on X, he wrote:
“I am literally saying CUT IT ALL. Now.”
This public dare stunned both political analysts and investors. It marked a rare moment when a tech titan openly invited the removal of government support—at a time when EV adoption still heavily depends on incentives.
Beyond the Headlines: A War of Influence
The feud is not just about money—it’s about power, ideology, and the shaping of America’s future. Musk’s influence over consumer behavior and digital communication rivals that of traditional political figures. Trump’s aggressive reaction signals his determination to control the narrative and punish dissent—even from within his usual circles of support.
The tension also reignites questions about the role of billionaires in public policy:
Can political threats override market forces?
Will other business leaders stay silent or take sides?
Is Musk's call to “cut it all” a strategic play—or a calculated risk?
What Comes Next?
DOGE in Action? Trump’s team may begin formal reviews of contracts and federal credits awarded to Musk-affiliated firms.
Tesla Earnings Watch: With slowing EV sales and political headwinds, Q2 earnings are expected to be under intense scrutiny.
Political Fallout: This showdown could reshape the relationship between Big Tech and conservative politics—potentially realigning donor support.
Comments