The bromance between Donald Trump and Elon Musk appears to be ending as the two men are shifting from allies to adversaries. This week, the simmering tensions between the president and the world’s most famous tech billionaire boiled over again. Trump threatened to pull Tesla deeper into turmoil just as the carmaker faces a growing list of problems.
Trump rekindled the feud on his social platform, Truth Social, accusing Musk of depending on “more government handouts than any living human in history” and suggesting the Tesla and SpaceX boss would “probably have to shut down and go back home to South Africa” if the spigot of federal funding were turned off. Trump called on DOGE — the very cost-cutting unit Musk once led — to scrutinise every dollar flowing to Musk’s empire.
“Pigs stuffing themselves”
Musk fired back on X, branding Trump’s newly approved One Big Beautiful Bill Act (OBBBA) “insane and destructive”. He accused Washington of “pigs stuffing themselves” at the taxpayer trough. He warned that he would launch a new “America Party” if the debt-boosting bill became law, citing a poll claiming 80% support among his followers.
The OBBBA has now been approved by the Senate, with Vice President J.D. Vance casting the decisive vote, as the result ended in a fifty-fifty tie. So, it passed by the narrowest margin possible.
Essentially, this bill seeks to reduce taxes and increase investment in the defense system by cutting healthcare and social aid. However, it also cuts EV subsidies, with a deadline moved forward by the Senate as soon as the 30th of September. However, these specific amendments require final approval by The Chambre, where the Republicans are also in the majority.
Dangerous
For Tesla, Trump turning his back on their CEO comes at a perilous moment. The company’s shares plunged 7% in a single day after the president claimed to axe subsidies for electric vehicles and cancel lucrative SpaceX contracts.
“It’s a dangerous moment for Tesla,” said Gene Munster, managing partner at Deepwater Asset Management, speaking to Bloomberg. “Investors were already anxious about softening demand. Now you have a president dangling the threat of cuts to the very subsidies that make EVs viable in the US.”
The fallout comes as Musk scrambles to plug holes in Tesla’s sales machine. Only last week, he dismissed longtime lieutenant Omead Afshar and has now taken personal charge of sales operations in North America and Europe.
For a CEO already stretched thin running SpaceX, X, Neuralink, and his new AI venture xAI — while also mulling a new political party — it’s a remarkable concentration of power, and risk.
Running on half capacity
“Musk is overexposed on multiple fronts,” said Dan Ives, senior analyst at Wedbush Securities. “His political rants and the feud with Trump could alienate the same voters and policymakers Tesla depends on. Add the global demand slump, and you have a perfect storm for the stock.”
Tesla’s operational problems only deepen the headache. The company’s factories are reportedly running at just half capacity, with quarterly deliveries expected to miss targets for a second straight time.
In China — Tesla’s most important market — sales are down by more than 22,000 units year-to-date despite aggressive price cuts and a refreshed Model Y.
Regret over the chainsaw act
The fight also risks eroding Musk’s public image. After losing left-wing customers over his political endeavours, he might now lose his newly found audience after funding millions in Trump’s electoral campaign.
Remember how Musk wielded a chainsaw on stage, declaring war on government waste? This week, he admitted on X that the stunt “lacked empathy” and was a mistake.
For Trump, picking a fresh fight with Musk plays well with voters wary of billionaires profiting from the federal government. For Musk, the cost could be more than bruised pride. As a senior analyst at Bernstein said in an interview with CNBC. “If this feud escalates, Tesla could be caught in the crossfire — and the market knows it.”
