• Tesla CEO Elon Musk’s disagreements with the Trump White House over the president’s budget bill spilled over into public discourse today.
• Musk’s partnership with Trump was once seen as positive for Tesla and Musk’s other businesses. 
• After Trump addressed the disagreement, Tesla’s stock price erased a month of gains.

Last November was a good time to be a Tesla bull.

On the heels of President Donald Trump’s return to the White House, Tesla’s stock price surged to some of its biggest heights in several year. Investors relished the idea of the Trump administration clearing out any regulatory hurdles for Elon Musk, the president’s biggest single campaign financier. And the Trump-Musk partnership seemed poised to be a positive one, with the Tesla CEO taking time away from his various businesses to lead an effort to unilaterally cut billions of dollars in federal spending. 

But now, not even six months into Trump’s second presidency, the relationship seems to be imploding in public.

Today, Tesla’s stock price sank more than 15% within hours after Trump denounced Musk at the Oval Office. In recent days, Musk has not only left his post as the head of the so-called Department of Government Efficiency, or DOGE, but the Tesla CEO has also railed against Trump’s signature budget bill currently working its way through Congress.

At the Oval Office today, according to CNBC, Trump indicated that Musk is unhappy that electric-vehicle tax credits are likely to be removed under the so-called Big, Beautiful Bill. Those incentives, enacted into law by President Joe Biden’s Inflation Reduction Act, have been in the crosshairs of Trump and other Republicans since their inception.

If the bill—which includes significant cuts to federal spending—is signed into law without those incentives, demand for EVs in America is expected to decline. Presumably, this would hurt Tesla’s bottom line as well.

Trump posted this on Truth Social, the Twitter-like social media network he owns:

 

“Elon and I had a great relationship. I don’t know if we will anymore,” Trump said today. “I was surprised.”

For his part, Musk has spent days lambasting the Big, Beautiful Bill on X, the Twitter-like social media network that he owns. Musk’s criticisms do seem to include the lack of EV tax credits, but he is also incensed that the bill is projected to significantly increase the federal deficit. 

 

 

Musk also said that without his nearly $300 million in financial support, Trump would have lost the election. And then Musk’s claims veered into, for lack of a better term, other matters:

 

It is a stunning reversal from their earlier partnership, wherein Musk was a frequent sight at countless cabinet meetings and referred to himself as the “First Buddy.” 

Evidently, the spat is having an impact today on investor optimism for Tesla. It was widely believed that the Trump administration would be favorable to Musk’s interests in return for his support. The administration was expected to provide a unified federal framework for autonomous cars, presumably, one that would benefit Tesla’s Robotaxi program. Plus, many supporters thought Trump would reward other ventures like SpaceX and Starlink with lucrative government contracts.

What happens next is anyone’s guess. Unfortunately for Tesla, Musk is widely believed to have alienated much of his left- and center-left-leaning core EV customer base. During his time leading DOGE and even afterward, Tesla stores across America (and indeed across the world) were the scenes of protests for months on end over his role in gutting federal jobs, aid programs and allegedly breaching data.

Now, if Musk has also alienated Trump, the Republican Party and their conservative base, who will form the bulk of his customer base? It’s an open question, one he’ll have to address as he gets back to the day-to-day business of running Tesla. 

Contact the author: patrick.george@insideevs.com