The Musk-Trump feud went to a new level on Tuesday, the president saying he wants his administration to “take a look” into whether the Tesla CEO should be deported.
After seemingly declaring a truce last month, Tesla CEO Elon Musk and Pres. Donald Trump went after each other again on Monday, the president threatening to trash federal subsidies for Tesla and SpaceX. It didn’t help the automaker’s stock as analysts warned of a sharp downturn in sales when Tesla reveals its second-quarter results on Wednesday. More from Headlight.News.
In friendlier times, Musk dumped more than $270 million to help get Trump elected.
The truce between Tesla CEO Elon Musk and Pres. Donald Trump has gone up in flames as Musk renewed his attack on the “Big Beautiful Bill,” the controversial federal budget bill working its way through Congress with the president’s strong support.
For his part, Musk warned lawmakers intending to vote for the bill that he will devote some of his vast fortune to beating them in upcoming primary elections and might also fund the launch of an entirely new political party.
That set Trump off again, the president warning he might seek to eliminate the billions of dollars in federal contracts and subsidies taken in each year by Musk’s two largest companies, Tesla and SpaceX. “No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE,” he posted on his Truth Social media site on Tuesday.
The feud has sent many Tesla investors scampering for the exit this week, Wall Street also growing nervous by the potentially significant downturn in Tesla sales the automaker is expected to announce on Wednesday.
The feud reignites
Trump has the president’s bully pulpit to work from.
The South African-born Musk served as one of the president’s most influential advisors during the administration’s first four months. But, barely a week after they staged a friendly farewell event in the Oval Office, the relationship went sour. The feud initially was set off when Musk attacked the budget measure, Trump quickly firing back.
At one point, the Tesla boss put up a post on X linking the president to Jeffrey Epstein, the serial sex offender who committed suicide while being held in a New York jail in August 2019. There have been rumors many powerful government and business leaders were connected to Epstein in files collected – but not released – by the FBI.
Both men appeared to reappraise the impact of their war of words, Musk offering a half-hearted apology, saying some posts “went too far.” But, as a vote on the budget bill neared, he again went public, posting on X: “The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country.” Musk warned that the 1,000-page bill “gives handouts to industries of the past while severely damaging industries of the future.”
He took things a step further, warning that the budget measure would be “political suicide for the Republican Party.”
Trump takes to the bully pulpit
Trump has the president’s bully pulpit to work from.
While Musk may be the world’s richest man, Donald Trump has the presidential bully pulpit to fire back from. And he showed the potential damage he could wield on Tuesday.
The Trump-backed budget bill already poses a problem for Tesla as it would eliminate by September the federal tax credits that have helped buoy demand for battery-electric vehicles in recent years. That, Trump suggested during a Tuesday meeting with reporters, may be what is really upsetting Musk.
“He’s upset that he’s losing his EV mandate and … he’s very upset about things but he can lose a lot more than that,” Trump said.
What else could be at risk, the president outlined in his Truth Social post, suggesting the Department of Government Efficient previously run by Musk now address the billions in contracts and subsidies provided Tesla and SpaceX. “Our country would save a FORTUNE,” Trump wrote.
More on Musk and Trump
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A new political party?
Musk has plenty of money he could use to create a new political party.
During the run-up to last November’s presidential election Musk reportedly invested more than $270 million in the Trump campaign, money many analysts believe was critical to winning the election.
Now, however, Musk is suggesting he would be ready to invest not only to beat incumbent Republicans in their next primaries – should they back the budget bill – but even to support the creation of an entirely new political party.
“Shame on those who voted for it: you know you did wrong. You know it,” Musk previously wrote on X. He took a step further over this past weekend, posting that, “if this insane spending bill passes, the America Party will be formed the next day.”
“Our country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE,” Musk added.
Slumping sales add to the worries
As if the battle between the world’s richest and the world’s most powerful men wasn’t enough to send shivers through the ranks of Tesla investors, there are other reasons for worry.
The automaker has suffered a sharp downturn in both Chinese and European demand this year – though Tesla sales soared by an unexpected 61% in Spain in June, according to new data released by the regional industry group ANFAC.
Demand in the home U.S. market is also expected to tumble for the second quarter, according to 23 analysts polled by Visible Alpha. The consensus suggests Tesla’s overall globally deliveries fell to 394,380 vehicles between March 1 and June 30, an 11% downturn. That would be only slightly better than the 13% shortfall during this year’s first quarter.
“I think a lot of analysts were thinking this quarter would have a bump positive because of the new Model Y,” Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management, said in a report to investors. “But the new Model Y in my mind isn’t such a departure from the old Model Y,” he said, adding that demand for the model did not live up to expectations.
Whatever the reason, Tesla shares tumbled nearly 6% in overnight trading, opening Tuesday at $298.42. The stock soon bounced back over the $300 mark but is still well off the June high of $354.48 and the 52-week peak of $488.54.
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