Washington: The ongoing tussle between US President Donald Trump and Tesla CEO Elon Musk is once again in the headlines. Trump on Tuesday (July 1, 2025) targeted Musk on his social media platform Truth Social, saying that if the government subsidies to Tesla and SpaceX stop, Musk may have to close his companies and return to South Africa. The statement came in response to Musk's criticism of Trump's 'Big Beautiful Bill', which Musk described as increasing the national debt.
What is the root of the controversy?
Trump's 'One Big Beautiful Bill' is an ambitious 940-page tax cut and spending bill, which the Senate advanced by a vote of 51-49. The bill provides for the elimination of electric vehicle (EV) subsidies, such as the $7,500 consumer tax credit, which is important for companies like Tesla. Musk called the bill part of the 'Porky Pig Party' and called it harmful to the US economy and threatened to form a new political party called the 'America Party' if it passed.
Trump hits back
Trump said in his post, "Elon Musk knew I was against the EV mandate. It's ridiculous and has been a big part of my campaign. Electric cars are fine, but not everyone should be forced to buy them. Musk has probably received more subsidies than any human being, and without subsidies he may have to close shop and return to South Africa." Trump also suggested that the 'Department of Government Efficiency' (DOGE), led by Musk formerly, could investigate the subsidies his companies receive.
Musk's response
Musk responded to Trump's threat by writing on X, "I'm saying, end all subsidies. Now." Musk claimed that his concern was not about losing subsidies, but about the national debt that the bill would increase.
Impact on Tesla
Following the controversy, Tesla's shares fell more than 7% on Tuesday night, affecting the company's market value. Analysts believe that the end of EV subsidies could affect Tesla's sales, as the $7,500 tax credit made its vehicles affordable for consumers.
Background
Musk, who was born in Pretoria, South Africa, contributed nearly $300 million to Trump's 2024 election campaign and was the head of DOGE. However, Musk resigned from this role in May 2025, after which tensions between the two increased.
What's next?
The controversy not only highlights the Trump-Musk relationship but also intensifies the debate on US EV policy and government subsidies. Countries like India, where the EV market is growing rapidly, are keeping an eye on these developments.
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