Tesla stock falls sharply as Elon Musk and Donald Trump publicly dispute over EV tax credits in the new budget bill.
Speaking from the Oval Office, Trump said Musk was upset that electric vehicle (EV) tax credits were left out of the bill. Elon and I had a great relationship. I don’t know if we will anymore,Trump said. I was surprised.”
Musk didn’t hold back either. Responding as Trump spoke, he fired back with a blunt Whatever. On X, Musk posted, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”
Known as the world’s richest man, Musk recently threatened to challenge lawmakers who support the bill in primary elections, calling it a disgusting abomination. This marks a sharp change from his previous stance towards the administration.
Tesla’s shares had rallied 22% in May despite weak sales, partly boosted by Musk ending his role as head of Trump’s so-called Department of Government Efficiency (DOGE). However, since Musk started publicly opposing the budget bill, shares have fallen 12% this week and are down over 20% for the year far below the high of $488.54 set on December 18.
Since his special government employee term ended last Friday, Musk has gone on the offensive against the administration’s signature tax-cut bill.
Walter Isaacson, author of a Musk biography, told CNBC’s “Squawk Box,” “One of the things about Elon is when he goes all in, he goes all in. He is somebody who’s not exactly calibrated in these things and he is seriously upset.”
Tesla Faces Bigger Challenges Beyond Political Drama
In recent days, Musk has unleashed a series of attacks on the Trump bill via X. NBC News revealed that Musk tried to convince Trump and GOP lawmakers to revise parts of the bill that would reduce EV and residential solar tax credits key profit drivers for Tesla.
The bill would also impose a new annual $250 fee on EV drivers.
Beyond political drama, Tesla faces deeper challenges. Its electric vehicle sales are plummeting in major European markets, and the brand’s reputation is weakening in the West.
Tesla is also under pressure to launch a long-delayed driverless ride-hailing service this month in Austin, Texas. While Musk says Tesla is testing autonomous vehicles there, the main competitor Waymo is already running a large commercial robotaxi operation in partnership with Uber.
Isaacson also noted Musk’s frustration with some Trump administration officials who opposed Jared Isaacman’s nomination as head of NASA. “That, to Musk, was just infuriating because they were doing, they were going after Jared Isaacman … to get at Musk,” Isaacson said.
Isaacman’s nomination was withdrawn over the weekend.
Jared Isaacman commanded two private space flights through Musk’s SpaceX in 2021 and 2024, leading crews on journeys around Earth. His payment tech firm Shift4 disclosed in 2021 financial filings that it had invested $27.5 million in SpaceX.
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