President Donald Trump stated on Thursday that he has no intention of undermining Elon Musk’s companies by revoking federal subsidies, emphasizing his desire for the billionaire tech entrepreneur’s businesses to flourish. These comments follow a public disagreement with his former close ally regarding Trump’s tax bill. In July, Musk, the space and automotive magnate, announced the formation of a new political party, asserting that Trump’s “big, beautiful” tax bill would bankrupt America.
“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large scale subsidies he receives from the US Government. This is not so!” Trump declared in a social media post. “I want Elon, and all businesses within our Country, to THRIVE.”
Musk’s Counter-Claim and Looming Funding Cuts
In a post on X, Musk countered, stating that the “subsidies” Trump referred to simply do not exist. He added that SpaceX secured NASA contracts by delivering superior performance for less money. “Moving those contracts to other aerospace companies would leave astronauts stranded and taxpayers on the hook for twice as much!”
The president’s social media post came immediately after Musk’s warning to Tesla investors on Wednesday. Musk had cautioned that potential cuts in U.S. government support for electric vehicle manufacturers could lead to “a few rough quarters” for the company. Although Musk has frequently advocated for the elimination of government subsidies, Tesla has historically benefited from billions of dollars in tax credits and other policy advantages due to its engagement in clean transportation and renewable energy.
Sweeping tax and budget legislation approved by Congress and signed by Trump is set to halt the $7,500 tax credits for buying or leasing new electric vehicles on September 30, as well as a $4,000 used EV credit. These incentives have significantly boosted electric vehicle sales in recent years.
The Deterioration of the Trump-Musk Relationship
Before their relationship soured, Musk had invested over a quarter of a billion dollars to support Trump’s bid for the November presidential election. He also spearheaded the Department of Government Efficiency’s chaotic efforts to slash the budget and reduce the federal workforce. The Tesla CEO departed the administration in late May to re-concentrate on his technology empire.
Trump and Musk had a falling out shortly thereafter when Musk openly criticized the Republican president’s tax-cut and spending bill. This led to threats from Trump to cancel billions of dollars worth of federal government contracts with Musk’s companies. A week after the June spat, Reuters reported that the White House had directed the Defense Department and NASA to compile detailed information on billions of dollars in SpaceX contracts, preparing for potential retaliatory measures against the businessman and his ventures.
Musk’s SpaceX was initially considered a frontrunner to construct Trump’s $175-billion Golden Dome missile defense shield and remains a natural choice for key components of the project. However, sources familiar with the matter informed Reuters this week that the administration is broadening its search for partners to build Golden Dome, as the escalating tension with Musk now threatens SpaceX’s dominant position in the program.
