Trump and Musk Clash Over Subsidies and the Future of Electric Vehicles

The escalating feud between former US President Donald Trump and tech mogul Elon Musk has grabbed headlines once again, highlighting deep divisions within American politics and the business world. Their latest spat revolves around federal subsidies for electric vehicles and a controversial Republican spending bill, dubbed the “Big Beautiful Bill.” This conflict not only exposes contrasting views on government support and market innovation but also signals potential shifts in the political landscape and energy policy.

the Original

On July 1, Donald Trump took to Truth Social to criticize Elon Musk, accusing the Tesla and SpaceX CEO of relying excessively on federal subsidies. Trump’s pointed warning suggested that without such government backing, Musk might have to “head back home to South Africa.” The post came amid rising tensions fueled by Musk’s recent condemnation of a Republican spending bill, which he labeled “political suicide” and threatened to counter with a new political party.

Trump’s attack targeted Musk’s dependence on government funds, including contracts, loans, and clean energy tax incentives, claiming these subsidies have allowed Musk’s companies to thrive where they otherwise wouldn’t. He reiterated his longstanding opposition to the federal electric vehicle mandate, which requires a gradual transition away from gas-powered cars.

In response, Musk took to X (formerly Twitter) to lambast the Republican “Big Beautiful Bill,” calling it “insane” and “debt-driving.” He warned that the bill would alienate fiscally conservative voters and pledged to create a new political movement—the “America Party”—to challenge the entrenched two-party system. Musk also declared his support for completely eliminating subsidies, including those benefiting his own ventures, insisting innovation should come from the market, not government handouts.

Central to the dispute is the “Big Beautiful Bill,” a sweeping legislative package intended to address federal deficit reduction while investing heavily in clean energy, infrastructure, and defense. The bill’s critics argue it could add \$2.4 trillion to the national debt over ten years, while proponents frame it as a vital step toward sustainable economic growth. Notably, the bill proposes revising or phasing out certain subsidies that directly impact Tesla and other electric vehicle manufacturers, escalating the stakes of this public battle.

What Undercode Say:

This clash between Trump and Musk underscores a larger debate over the role of government subsidies in driving innovation and shaping the future of energy. Musk’s bold rejection of subsidies—even those supporting his own companies—signals a philosophical commitment to free-market principles and skepticism toward what he perceives as government interference. Trump, conversely, positions himself as a defender of fiscal conservatism, targeting what he sees as wasteful spending and political favoritism.

The “Big Beautiful Bill” itself reflects this tension: it attempts to balance ambitious clean energy goals with fiscal responsibility but has been criticized on both sides for either overreach or insufficient ambition. Musk’s public denouncement of the bill and his threat to form a new political party reveal growing frustration with traditional partisan politics. This move could galvanize voters disillusioned with both Republicans and Democrats, especially around issues like fiscal policy and climate action.

Moreover, Trump’s proposal to have the Department of Government Efficiency (DOGE)—a nod to Musk’s brief role overseeing the agency—investigate subsidies points to a politically charged attempt to scrutinize and potentially curb Musk’s influence. This public spotlight on subsidies invites broader scrutiny of how government incentives shape business success in emerging sectors like electric vehicles and space technology.

The interplay between innovation, regulation, and political strategy here is complex. On one hand, subsidies have undeniably helped accelerate electric vehicle adoption and space exploration. On the other, excessive reliance on government support can distort markets and create vulnerabilities. Musk’s call for eliminating subsidies altogether is radical but highlights a desire for a market-driven future free from political entanglements.

This feud also highlights the evolving identities of both figures. Trump is consolidating his base around economic nationalism and anti-establishment rhetoric, while Musk is increasingly positioning himself as a disruptor not just in tech but in politics. The emerging “America Party” concept could reshape electoral dynamics if it gains traction, particularly among tech-savvy and fiscally conservative voters disillusioned by the current system.

In sum, the Musk-Trump confrontation is more than a personal rivalry—it’s a microcosm of the ideological battles shaping America’s economic and environmental future. How this dispute plays out could influence policy decisions on subsidies, climate regulation, and the political alignment of key voting blocs in the years ahead.

Fact Checker Results:

✅ Trump’s claim that Musk benefits heavily from federal subsidies is supported by various reports showing Tesla’s use of tax credits and government contracts.

✅ Musk’s threat to form a new political party has been publicly stated, although such initiatives historically face significant challenges.

❌ Estimates about the “Big Beautiful Bill” adding \$2.4 trillion to the deficit come from independent analyses but remain subject to political debate and varying fiscal assumptions.

📊 Prediction:

The growing public confrontation between Trump and Musk will likely deepen divisions within the Republican Party and among conservative voters. Musk’s potential launch of a third-party movement could attract support from those frustrated with traditional politics, but it may also fragment the conservative base, inadvertently benefiting Democrats in upcoming elections.

Policy-wise, pressure to reform or eliminate subsidies for electric vehicles may intensify, especially if bipartisan scrutiny grows. However, given the accelerating push for clean energy and climate goals, outright subsidy elimination seems unlikely in the short term. Instead, expect a more nuanced approach—tightening eligibility criteria, scaling back incentives for mature technologies, and incentivizing next-generation innovations.

Ultimately, this feud signals a shift toward more vocal and ideologically driven tech leaders influencing political discourse and public policy, blurring the lines between business, politics, and activism in unprecedented ways.