The president’s public assurance that he wouldn’t strip federal support from Elon Musk’s companies triggered a fierce rebuttal, deepening the high‑stakes feud over fiscal policy and energy subsidies.
At a Glance
- On July 24, 2025, President Trump declared he had no plans to dismantle Musk’s business empire or rescind support
- Trump claimed Musk receives “large‑scale subsidies,” which he insisted he wouldn’t revoke so US companies could “thrive”
- Elon Musk responded via X that “the ‘subsidies’ he’s talking about simply do not exist,” noting that clean‑energy incentives had been ended under the Trump administration while fossil‑fuel support remained
- Musk defended SpaceX, stating it won NASA contracts by delivering stronger performance at lower cost and warned reassigning them could endanger space missions and raise taxpayer expense
- Tesla warned investors of “rough quarters” ahead due to the loss of the $7,500 EV tax credit under the administration’s new spending legislation
Showdown Over Subsidies
President Trump’s message on Truth Social appeared to signal a détente: he said he had “no intention of destroying Elon Musk’s companies” and insisted that thriving businesses are vital to national prosperity. But Trump also referenced alleged large-scale subsidies Musk supposedly still benefited from—language interpreted as a veiled threat, considering their recent political rift.
In a sharp rebuttal on X, Musk rejected the premise outright: “The ‘subsidies’ he’s talking about simply do not exist.” He highlighted the removal or expiration of clean‑energy tax credits under Trump’s flagship legislation, while noting that federal support remained intact for traditional oil and gas industries.
Watch a report: Wants Tesla to Thrive in US | Musk vs Trump · YouTube
Stakes for Tesla and SpaceX
Tesla is expected to feel immediate headwinds. Earnings guidance issued on July 24 flagged the loss of the $7,500 federal EV credit as a significant drag—Tesla’s CFO called it an “abrupt change” likely to affect US deliveries.
Meanwhile, Musk defended SpaceX’s federal contracts, arguing the company consistently underbid competitors and delivered crucial NASA work more cost effectively. He warned that diverting contracts to other firms could jeopardize astronaut missions and cost taxpayers double.
This comes after Musk played a key role as head of the Department of Government Efficiency (DOGE) under Trump in 2024 and early 2025—an appointment that has now soured into public tension.
Fallout and Future Flashpoints
The spat stems from Musk’s earlier criticism of Trump’s “One Big Beautiful Bill,” calling it a “disgusting abomination” for gutting green energy incentives while preserving fossil fuel subsidies. Musk later said he “could have a few rough quarters” ahead due to the policy shift.
Despite Trump’s assertion of support, the tension is far from resolved. Musk’s firm stance signals that reconciliation may be unlikely, and investors are already bracing for volatility as Tesla navigates subsidy cuts and SpaceX faces heightened scrutiny.
Watch this relationship unfold as both sides dig in—one claiming validity, the other denying dependency entirely.