President Donald Trump emphatically denied plans to strip federal subsidies from Elon Musk’s companies, declaring on Truth Social: “Everyone is stating that I will destroy Elon’s companies... This is not so!” He insisted he wants Musk and all U.S. businesses, to “THRIVE like never before”. The statement reverses Trump’s June threat to “terminate Elon’s Governmental Subsidies and Contracts” to save “Billions and Billions of Dollars”. White House Press Secretary Karoline Leavitt had earlier suggested the administration opposed agencies contracting with Musk’s ventures.
Musk swiftly countered Trump’s framing, asserting on X that the “subsidies” simply “do not exist.” He argued SpaceX secured NASA contracts by outperforming rivals on cost and efficiency, warning that shifting contracts would “leave astronauts stranded and taxpayers on the hook for twice as much!”. His rebuttal downplays Tesla’s historical reliance on EV tax credits and regulatory sales totaling $12.24 billion since 2015.
Despite the truce, the Pentagon is actively diversifying partners for Trump’s $175 billion Golden Dome missile defense system, reducing reliance on SpaceX. Amazon’s Project Kuiper, Northrop Grumman, and Lockheed Martin are now contenders for satellite and interceptor contracts. Though SpaceX remains a launch frontrunner, Musk has shown limited interest, stating SpaceX’s “strong preference would be to stay focused on taking humanity to Mars”. The shift began before Trump’s June feud with Musk but accelerated amid tensions.
Musk warned investors that Tesla faces turbulence after Trump’s “One Big Beautiful Bill Act” ends $7,500 new-EV and $4,000 used-EV tax credits on September 30. Tesla’s quarterly filing explicitly cites the law (OBBBA) as a risk, noting it could “negatively impact demand” and battery costs. Musk’s criticism of the bill in July, calling it a “disgusting abomination”, triggered the rift with Trump.
The clash caps a dramatic fallout between former collaborators. Musk spent $277 million to help Trump win the 2024 election and briefly led the “Department of Government Efficiency” before resigning in May. Their relationship crumbled when Musk launched the “America Party” to oppose Trump-aligned Republicans and accused the president of hiding Epstein files. While Trump now claims “no hard feelings,” the Golden Dome pivot signals enduring friction.