US President Donald Trump has threatened to end federal funding for Elon Musk’s companies, including Tesla and SpaceX. This move follows Musk’s sharp criticism of a new tax and spending bill. The bill proposes removing electric vehicle (EV) subsidies, which have long supported Tesla. Trump said Musk could “lose a lot more” if he keeps attacking the plan.
Musk fired back by threatening to fund political challengers and form a new political party. He previously helped develop the government efficiency program DOGE but stepped back in May. Trump mocked Musk’s involvement in DOGE and claimed Musk had received “more subsidies than any human in history.” He warned that future government contracts might be in danger.
Tesla and SpaceX rely heavily on federal money. SpaceX holds about $22 billion in government contracts. Tesla also made $2.8 billion from EV regulatory credits last year. However, the proposed bill could wipe out these credits. Tesla shares dropped over 6% as investors worried about the feud’s impact.
This clash comes at a tough time for Musk. Tesla is testing a robotaxi project in Texas that still needs regulatory approval. Meanwhile, sales are down in Europe, and the U.S. market may shrink if subsidies end. Some experts believe Musk’s political ties are turning buyers away.
Despite Musk’s defiance, Trump holds more leverage with federal agencies. Some Republicans now fear the feud could hurt their chances in the 2026 elections. When asked about Musk’s future, Trump hinted at deportation but didn’t give a clear answer. The dispute shows no signs of calming down.