Trump threatens to stop Elon Musk’s contracts, subsidies as feud gets messier

The rift between United States President, Donald Trump, and Elon Musk deepened on Thursday as the president suggested pulling federal subsidies and government contracts from Musk’s companies — a move that could have serious financial implications.

“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump wrote in a social media post.

The threat targets core sources of revenue for Musk’s business empire, including Tesla Inc. and SpaceX, both of which have benefited significantly from U.S. government support.

Tensions flared throughout the day as Trump and Musk exchanged criticisms online and in public comments. The clash followed Musk’s objections to the Republican tax legislation — a key component of Trump’s policy agenda — which includes cuts to electric vehicle tax credits.

“Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in another post.

Speaking to reporters earlier, Trump expressed dismay over Musk’s opposition. “I’m very disappointed in Elon. I’ve helped Elon a lot,” he said during an Oval Office meeting with German Chancellor Friedrich Merz. “He said the most beautiful things about me, and he hasn’t said bad about me personally, but I’m sure that’ll be next.”

Musk, who served briefly in Trump’s administration as a Special Government Employee focused on cost-cutting initiatives, offered real-time rebuttals on X, the social media platform he owns.

“Such ingratitude,” he posted, referencing his support for the GOP during the 2024 election. “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”

The dispute rattled markets, with Tesla stock dropping as much as 6% at one point during the trading session.

Musk rejected the idea that his criticism was driven by financial interests. “This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!” he said. He also wrote that he supported reducing EV tax credits if Congress also eliminated “the MOUNTAIN of DISGUSTING PORK in the bill.”

The Republican proposal would accelerate the phaseout of a $7,500 tax credit for electric vehicle buyers, ending it by 2025 — a timeline that could cut Tesla’s annual profits by about $1.2 billion, according to JPMorgan estimates.

“I’m very disappointed because Elon knew the inner workings of this bill better than almost anybody sitting here,” Trump said Thursday. “All of the sudden, he had a problem and he only developed a problem when he found out we’re going to have to cut the EV mandate.”

Trump also brought up internal disagreements over leadership picks, noting that Musk had pushed for Jared Isaacman to head NASA — a suggestion Trump rejected partly due to Isaacman’s prior ties to Democrats. “I didn’t think it was appropriate,” Trump said. “He wanted that person, a certain person, and we said no.”

The unraveling of their relationship marks a sharp contrast to recent weeks. Just days earlier, Trump hosted Musk at a White House event celebrating his tenure. Recalling the occasion during his meeting with Merz, Trump noted Musk had a visible bruise at the time.

“I said do you want a little makeup? We’ll get you a little makeup. but he said ‘no, I don’t think so,’ which is interesting and very nice,” Trump said. “He wants to be who he is.”