(Bloomberg) — Donald Trump threatened to withdraw government subsidies from Elon Musk’s companies and examine the billionaire’s immigration status after the Tesla Inc. chief executive officer ratcheted up his criticism of the president’s tax and spending bill.
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President Trump wrote on Truth Social that the cost-cutting effort that Musk pitched during Trump’s campaign and led for months may now be turned against the leader of Tesla and Space Exploration Technologies Corp., writing that DOGE could take a hard look at US funding for rocket launches, satellites and electric cars.
Musk “may get more subsidy than any human being in history, by far,” Trump posted. Without that government support, “Elon would probably have to close up shop and head back home to South Africa.”
When asked by reporters outside the White House on Tuesday about his threats to deport Musk, who was born in South Africa but holds US citizenship, Trump said that he would “have to take a look.” In an X post in response, Musk said that it was “so tempting to escalate this,” but that he would “refrain for now.”
Tesla’s stock fell 7% in early trading Tuesday as it became clear that the rift between Trump and Musk that exploded into the public eye last month was revving up again after quieting in recent weeks. The stock is set to extend a five-day losing streak to a sixth straight session, the longest such run since late February.
Almost a month after the incendiary spat, Musk began to ramp up criticism of Trump’s tax and spending bill through a series of posts on his social network, X, after Senate Republicans unveiled a new version of their tax-cut package Saturday that expedited the end of a popular $7,500 consumer tax credit for electric vehicle purchases.
Musk took aim at Congress members who supported the bill, threatening to launch a new political party and vowing to boost his political spending to unseat lawmakers who voted for the bill during the next round of US elections.
“If this insane spending bill passes, the America Party will be formed the next day,” Musk said on X, reprising his call for a new political party in the US. He denied that his opposition is based on preserving subsidies for his companies, writing in another post: “I am literally saying CUT IT ALL. Now.”
In addition to selling more EVs that are eligible for consumer incentives than any other company, Tesla and its battery partner Panasonic Holdings Corp. are best positioned to receive production tax credits that were included in former President Joe Biden’s signature climate bill.
Tesla also sells regulatory credits to other carmakers that need help complying with California’s zero-emission vehicle mandate and US auto-emissions standards. Analysts at JPMorgan Chase & Co. estimated early this year that the shifting regulatory landscape under Trump threatened roughly 40% of Tesla’s profits.
“Elon Musk knew, long before he so strongly Endorsed me for President, that I was strongly against the EV Mandate,” Trump said in his Truth Social post. “It is ridiculous, and was always a major part of my campaign. Electric cars are fine, but not everyone should be forced to own one.”
Tesla is poised to release second-quarter deliveries this week that will likely show a further slump in demand, with analysts on average estimating the company sold around 390,600 vehicles worldwide. That would be down roughly 12% from a year ago, following a 13% drop in the first quarter.
–With assistance from Peter Vercoe, Lianting Tu, Akayla Gardner, Skylar Woodhouse and Esha Dey.
(Updates with Musk’s response in fourth paragraph.)
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