Tesla shares slide as Trump-Musk feud reignites over tax bill, subsidies

Published 01/07/2025, 07:42
Updated 01/07/2025, 08:18
© Reuters

Investing.com-- Tesla Inc (NASDAQ:TSLA) shares fell sharply in 24 hour trading on Tuesday after U.S. President Donald Trump escalated his feud with Elon Musk, accusing the Tesla CEO of benefiting excessively from government subsidies and calling for a review of his company’s federal support.

Tesla’s shares fell as much as 6.4% to $297.35, 24-hour trading data from Robinhood (NASDAQ:HOOD) showed. 

In a post on Truth Social, Trump suggested that the Department of Government Efficiency (DOGE) should examine Tesla’s federal support, warning that “Elon may get more subsidy than any human being in history”.

"Without subsidies, Elon would probably have to close up shop and head back home to South Africa," Trump added.

In response, Musk took to X, saying, “I am literally saying CUT IT ALL. Now.”

Trump’s ire towards Musk stems largely from the Tesla CEO’s criticism of a sweeping tax and spending cut bill backed by Trump, which is currently making its way through the Senate.

Musk’s criticism has been aimed chiefly at the fiscal impact of the bill, which he claims will sharply increase government debt and spending. Musk also claimed that the bill would undermine his work with the Department of Government Efficiency to cut federal spending. 

A non-partisan analysis of the bill showed that it stands to increase government debt by $3.3 trillion in the coming decade, if it passes through in its current state. 

Musk has repeatedly criticized the bill for being too big and bloated. His criticism of the bill was also at the heart of a public falling out with Trump in early-June, which saw Musk step down from his role with DOGE. 

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