Elon Musk’s high-profile fallout with former US President Donald Trump is now threatening to cost Tesla billions in government subsidies, according to recent reports. The once-amicable relationship between the two influential figures has soured dramatically, and the financial repercussions for the world’s largest electric vehicle (EV) manufacturer could be significant.
A report by Sky News suggests that Tesla’s meteoric rise has been heavily reliant on state support. In fact, government subsidies accounted for at least 38% of the company’s profits last year. During the first quarter of this year alone, Tesla earned $595 million from regulatory credits—almost 50% more than its net profit of $409 million. Without these subsidies, Tesla may be operating at a loss, raising serious questions about its long-term financial stability.
Donald Trump hasn’t held back in criticising Musk. Writing on his social media platform Truth Social, Trump claimed:
“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 to South Africa.”
Investment analyst and long-time Tesla critic Gordon Johnson echoed Trump’s concerns. Speaking to Sky News, he warned:
“If all of these government programmes were taken away, Tesla would go into losing money and burning cash and the stock would implode.”
The tension between Musk and Trump reportedly escalated after Musk stepped down from his role as head of the Department of Government Efficiency (DOGE). In a scathing post on X (formerly Twitter), Musk slammed Trump’s signature legislation—dubbed the ‘Big, Beautiful Bill’—as a “disgusting abomination.”
In a now-deleted post, Musk went further, alleging:
“@realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Mark this post for the future. The truth will come out.”
He also warned that Trump’s proposed tariffs would “cause a recession in the second half of this year.”
Trump retaliated by threatening to cancel Musk’s existing government contracts. In an interview with NBC News, he said Musk had been “disrespectful” and added:
“I think it’s a very bad thing, because he’s very disrespectful. You could not disrespect the office of the president.”
White House press secretary Karoline Leavitt commented on the dispute, stating:
“This is an unfortunate episode from Elon, who is unhappy with the One Big Beautiful Bill because it does not include the policies he wanted. The president is focused on passing this historic piece of legislation and making our country great again.”
Fact-Check & Disclaimer:
All information published on 2CJR.com is based on publicly available sources, media reports, and where relevant, our editorial insights. While we strive to ensure our content is accurate and up to date, political dynamics, economic policies, and subsidy structures may evolve rapidly. Readers are encouraged to verify any financial or legal implications independently, especially when it concerns ongoing government programmes or business regulations.