Elon Musk pushes back on Trump's subsidies claim

The rocky relationship between Elon Musk and President Donald Trump took another turn on Thursday, after Trump said he wouldn’t take away the “subsidies” that benefit Musk’s companies, and that he wanted companies like Tesla $TSLA and SpaceX to “thrive, like never before”

Musk quickly jumped on X $TWTR to respond.

“The ‘subsidies’ he’s talking about simply do not exist. DJT has already removed or put an expiry date on all sustainable energy support while leaving massive oil & gas subsidies untouched,” Musk wrote.

Musk: It’s contracts, not handouts

In his post, Musk argued that the federal dollars flowing to his businesses are earned through competition, not giveaways.

“SpaceX won the NASA contracts by doing a better job for less money,” he said, adding that reassigning the work to other aerospace companies “would leave astronauts stranded and taxpayers on the hook for twice as much.”

From allies to enemies

It’s a big change in tone for the pair. Musk was one of Trump’s biggest backers during the 2024 election, pouring at least $277 million into the campaign and later leading Trump’s Department of Government Efficiency.

But things soured fast this summer. In June, Musk publicly trashed Trump’s massive spending bill — calling it “a mountain of disgusting pork” — and even claimed credit for Trump’s election victory.

Trump hit back, threatening to cancel Musk’s government contracts. The spat sent Tesla’s stock tumbling 5%.

Earlier in July, the Tesla CEO announced the formation of the “America Party,” a third-party effort aimed at flipping a small number of congressional seats to gain outsized influence in Washington.

Trump didn’t mince words in response. “I am saddened to watch Elon Musk go completely ‘off the rails,’ essentially becoming a TRAIN WRECK,” the president wrote on Truth Social.

EV incentives roll back

Tesla is already feeling the pinch from Trump’s policies. During this week’s earnings call, CFO Vaibhav Taneja said losing the $7,500 federal EV tax credit created a “limited supply” of cars for U.S. buyers.

Musk warned investors that Tesla was heading into a “weird transition period” with the loss of incentives. “Could we have a few rough quarters? Yeah,” he said. Tesla shares are down 24% this year.

Billions still at stake

Even as Musk insists subsidies are a thing of the past, his companies still depend on federal dollars. A Washington Post analysis earlier this year found Tesla, SpaceX, and Musk’s other ventures have collected at least $38 billion in contracts, loans, and tax credits over the last two decades.

SpaceX alone has racked up more than $22 billion in government contracts since 2008, while Tesla has made more than $12 billion selling environmental credits to other automakers.

— Shannon Carroll contributed to this article.