Amid their public feud over the looming tax bill, US President Donald Trump has suggested that the Department of Government Efficiency (DOGE) review subsidies tied to once ally Elon Musk, including those received by Tesla and SpaceX, in order to save money.
“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. No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!,” the president said in an early morning post on Trump’s social media platform Truth Social.
Trump’s remarks on Tuesday came after Musk renewed his criticism of the sweeping tax-cut and spending bill — which the White House hopes to sign into law by July 4th — pledging to unseat lawmakers who supported it after campaigning on limiting government spending.
Shortly after, Senate Republicans hauled Trump’s big tax breaks and spending cuts bill to passage Tuesday on the narrowest of margins, pushing past opposition from Democrats and their own GOP ranks after a turbulent overnight session.
The outcome capped an unusually tense weekend of work at the Capitol, the president’s signature legislative priority teetering on the edge of approval or collapse. In the end, that tally was 50-50, with Vice President JD Vance casting the tie-breaking vote.
Musk and Trump spar over bill
Feuding with Trump could create hurdles for Tesla and the rest of Musk’s business empire.
The US Transportation Department regulates vehicle design and would play a key role in deciding whether Tesla can mass-produce robotaxis without pedals and steering wheels, while Musk’s rocket company SpaceX has about $22bn in federal contracts.
Trump previously threatened to cut Musk’s government contracts when their relationship erupted into an all-out social media brawl in early June over the bill, which non-partisan analysts have said would add about $3 trillion to the US debt.
But after weeks of relative silence, Musk rejoined the debate on Saturday as the Senate took up the package, calling it “utterly insane and destructive” in a post on X.
On Monday, he said lawmakers who campaigned on cutting spending but backed the bill “should hang their heads in shame!” “And they will lose their primary next year if it is the last thing I do on this Earth,” Musk added.
The criticism marked a dramatic shift after the billionaire spent nearly $300m on Trump’s re-election campaign and led the administration’s controversial DOGE initiative.
Musk has argued that the legislation would greatly increase the national debt and erase the savings he says he achieved through DOGE.
Conflicts of interest
Musk was long slammed for his conflicts of interest while leading DOGE — accused of going after government agencies that had open investigations against him and his associated companies.
A report from the left-leaning think tank Public Citizen found that 70 percent of the agencies in May found that Musk aimed to make significant cuts to agencies, including the National Highway Traffic Safety Administration, which had been investigating Tesla.
The Food and Drug Administration, which had been investigating his brain implant chip, Neuralink, and cuts to the Department of Defense, which has been called for by both progressive Democrats as well, comes as SpaceX receives more than $22bn in federal contracts from the agency, according to the report.
The market response
There are conflicts with Musk within the bill he’s actively rallying against. The bill, which Trump eliminated the EV tax credit, Musk originally said would not hurt Tesla. The EV tax credit, however, has helped other carmakers make more affordable electric vehicles for more consumers, and Musk has recently changed his tune.
In a note last month, JP Morgan said cutting the EV tax credit could cost Tesla $1.2bn annually. Now the market is reacting as these plans might come to fruition in a matter of days, and amid the president’s Truth Social post, spooking investors.
Tesla stock tumbled roughly 6 percent as of 11:00am ET (15:00 GMT) and about 13 percent over the last five days.
“[This] BFF situation has now turned into a soap opera that remains an overhang on Tesla’s stock with investors fearing that the Trump Administration will be more hawkish and show scrutiny around Musk related US government spending related to Tesla/SpaceX and most importantly the autonomous future with the regulatory environment key to the future of Robotaxis and Cybercabs,” Dan Ives, senior analyst at Wedbush Securities said in a note provided to Al Jazeera earlier this morning.
Musk’s other companies include SpaceX, X Corp, and Neuralink are privately held companies.
More broadly the markets erased some of the gains in the last few days. The tech-heavy Nasdaq is down by about a full percentage point and the S&P 500 down 0.3 percent. Dow Jones Industrial Average, on the other hand, is trending upwards, roughly 0.6 percent higher than the market open.
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