A high-profile war of words has erupted between former President Donald Trump and Tesla CEO Elon Musk, sending shockwaves through Wall Street and wiping more than $150 billion off Tesla’s stock value. At the heart of the clash? Electric vehicle (EV) subsidies, a controversial spending bill, and the future of America’s clean tech policy.
From Allies to Adversaries
The feud marks a dramatic U-turn in the Trump–Musk relationship. Just months ago, the two posed together in front of a Tesla Cybertruck outside the White House. Musk was even handed a ceremonial key to the building after serving as head of the now-defunct Department of Government Efficiency (DOGE). But the bromance has soured — fast.
In a scathing public address from the Oval Office, President Trump accused Musk of being “upset” over the administration’s decision to axe the EV mandate, which had previously propped up demand for electric cars through federal tax credits.
“Elon is upset because we took the EV mandate, which was a lot of money for electric vehicles,” Trump said. “They’re having a hard time with the electric vehicles, and they want us to pay billions of dollars in subsidies. Elon knew this from the beginning.”
What Sparked the Row?
The fallout centres around Trump’s so-called “Big, Beautiful Bill” — a sweeping piece of legislation that proposes removing the $7,500 federal tax credit for EVs by the end of the year. According to analysts at JPMorgan, losing that credit could cost Tesla more than $1.2 billion in lost revenue.
Musk, who has previously expressed libertarian views on government spending, is now vocally opposing the bill. Despite once tweeting “take away the subsidies — it will only help Tesla,” he now warns that Trump’s new policy direction could “bankrupt America.” The billionaire has urged followers to call their senators and demand they “KILL THE BILL”, slamming it as a bloated package full of “DISGUSTING PORK” — a reference to unrelated spending tacked onto the legislation.
He also took aim at what he sees as hypocrisy in the bill’s continued support for fossil fuel subsidies, calling it “very unfair” that oil and gas incentives remain untouched while clean energy is cut off.
Trump Fires Back
Never one to back down from a fight, Trump hit back on his social media platform, Truth Social, accusing Musk of going “CRAZY” and being out of touch with what American drivers want.
“I took away his EV mandate that forced everyone to buy Electric Cars that nobody else wanted,” Trump posted. “He knew for months I was going to do it!”
The comments reflect a broader Republican shift away from the clean tech agenda championed by President Biden. Trump has made clear he wants to roll back green subsidies in favour of what he calls “consumer choice” — code for removing market advantages for EVs.
Financial Fallout
The public brawl has had serious consequences for Tesla’s valuation. The EV giant saw a staggering $153 billion (£112 billion) wiped from its market cap in the days following Trump’s comments. While some of the decline was likely due to wider concerns over slowing EV demand, analysts say the political uncertainty around federal support for EVs has compounded investor fears.
In the UK, Tesla’s sales have also taken a hit. New registrations fell 36% in May compared to the same month last year, and Tesla’s market share has dropped to just 1.76%. Meanwhile, Chinese rival BYD is closing the gap fast, selling nearly as many vehicles as Tesla so far in 2025 — a rise of 570% year-on-year.
Musk’s Tightrope Act
Musk’s position is complicated. While he remains an advocate for sustainable transport and clean energy, he’s also spent years railing against government regulation and intervention. His latest shift — from calling for an end to subsidies to now defending them — has left critics accusing him of opportunism.
Supporters argue that Musk is simply reacting to a policy shift that unfairly advantages fossil fuels. They point out that removing EV credits while keeping oil and gas subsidies undermines America’s energy transition.
A Bigger Battle Over Clean Tech?
Beyond personal insults, the spat highlights a deeper political divide over the future of EVs in the US. Trump’s camp argues that mandates and subsidies distort the market and saddle taxpayers with unnecessary costs. Musk — now free from his government role — appears to be repositioning Tesla as a victim of political sabotage.
With elections on the horizon and clean energy now a wedge issue, expect this row to intensify. For Tesla investors, it’s a warning that EV adoption is no longer just about technology or consumer demand — it’s about politics, too.
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John is the Editor and Spokesperson for Electric Car Guide.
With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.
John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.
