Donald Trump just noticed that Elon Musk gets government subsidies. Well, knock me over with a feather.
The former president's Truth Social broadside against Musk—claiming he's "getting more subsidy than any human being in history"—sent Tesla shares tumbling nearly 6% in European markets before most Americans had their morning coffee. It's the kind of market-moving tweet (sorry, "Truth") that we've all come to expect from the former Tweeter-in-Chief.
But timing is everything in politics, isn't it? Trump's sudden discovery of Musk's subsidy empire comes suspiciously close on the heels of Musk criticizing the Senate version of Trump's tax bill. The specific issue? Cuts to EV credits that—wouldn't you know it—happen to benefit Tesla. Funny how principles materialize when your bottom line is threatened.
I've been watching the Musk-Trump relationship evolve since their first awkward Trump Tower meeting back in 2016, and this latest chapter feels almost inevitable. Two outsized egos were bound to collide eventually.
Look, there's something almost poetic about this particular fight. You've got Musk—a billionaire who built multiple companies on the back of government support while maintaining his libertarian credentials. And in the opposite corner stands Trump—a real estate mogul whose empire benefited from countless tax abatements and government programs, now suddenly playing anti-subsidy crusader.
It's like watching two career politicians accuse each other of being career politicians.
The history of Tesla's government support is well documented. There was that $465 million Department of Energy loan back in 2010 (which, to be fair, Tesla repaid early). The company has also benefited enormously from the $7,500 EV tax credit that's helped make their vehicles more accessible to consumers. Without these programs... well, that's the billion-dollar question, isn't it?
And that's what makes Trump's dig about Musk having to "close up shop and head back home to South Africa" without subsidies so pointed—and potentially damaging.
Tesla's upcoming Q2 sales report is expected to show continued weakness in demand. The timing of this political dustup couldn't be worse for shareholders, who've already weathered Musk's Twitter/X acquisition, robot promises, and various other distractions from the core business. At some point, you have to wonder if Tesla investors are developing Stockholm syndrome.
(I spoke with three institutional investors yesterday who all expressed variations of the same sentiment: "We've priced in Elon's antics, but not a direct confrontation with the possible next president.")
The most entertaining aspect of Trump's post might be his suggestion that "DOGE" should investigate Musk's subsidies. Is that the Defense Office of General Counsel? Or—more likely—a reference to Dogecoin, the cryptocurrency Musk has championed? With Trump, the line between policy threat and inside joke is deliberately blurred.
The broader question here deserves serious consideration, though. What happens to America's EV transition if these tax credits disappear? They've certainly accelerated adoption, but critics have long pointed out that they primarily benefit wealthy consumers. The average Tesla buyer isn't exactly clipping coupons to make ends meet.
For Tesla specifically, this political uncertainty hits at a vulnerable moment. The company faces increasing competition from both established automakers and Chinese manufacturers. Margins are compressing. The growth narrative that's supported their eye-watering valuation is showing serious cracks.
And now this.
The irony that shouldn't be lost on anyone is that Musk endorsed Trump partly because he believed Trump would be better for his businesses than the alternative. Now he's learning the lesson many Trump allies have discovered before him—loyalty runs one direction in Trump's world, and yesterday's friend can become today's target faster than a Model S Plaid hits 60 mph.
But perhaps we shouldn't be surprised. When it comes to government subsidies, every industry from agriculture to aerospace has its hand out in Washington. The only real difference is how openly they admit it.
Tesla investors should probably buckle up. When the worlds of Elon Musk and Donald Trump collide, the only guaranteed outcome is volatility.
And perhaps... a few more Truth Social posts.
