Tesla shares made a sharp fall in the US stock market on Tuesday, tumbling as much as 5.1% at the time of filing this report. The decline follows a renewed clash between Tesla CEO Elon Musk and President Donald Trump over federal subsidies and tax policy.
Trump, in his latest remarks, urged the government efficiency department to review the billions in subsidies received by Musk’s companies, including Tesla and SpaceX. The call comes after Musk, a vocal critic of government spending despite being a top Republican donor, lashed out at the recently passed tax-and-spend bill and vowed to campaign against lawmakers who supported it. His criticism of Trump’s 940-page “Big, Beautiful Bill,” which includes tax breaks and deep cuts to healthcare and food programs has drawn sharp backlash from Democrats and even some Republicans.
The Tesla and SpaceX CEO called for the creation of a new political party, claiming the bill’s massive spending proves “we live in a one-party country – the PORKY PIG PARTY!!”
In a post on his Truth Social platform, the President wrote, “Elon Musk knew, long before he so strongly Endorsed me for President, that I was strongly against the EV Mandate. It is ridiculous, and was always a major part of my campaign. Electric cars are fine, but not everyone should be forced to own one.”
He continued, “Elon may get more subsidy than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa.” The President also suggested that DOGE, which Musk led until stepping down in late May, should investigate the billionaire’s ventures. “No more Rocket launches, Satellites, or Electric Car Production, and our Country would save a FORTUNE. Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED,” he added.
The political spat is not the only trouble facing Tesla. The company reported its sixth consecutive monthly sales decline in Sweden and Denmark in June. The reports highlighted growing international headwinds. Adding to investor anxiety, Musk has reportedly taken direct control of Tesla’s sales operations in Europe and the US following the departure of senior executive Omead Afshar, according to Bloomberg News.
Meanwhile, Tesla’s shares were down over 6% in pre-market trading, with concerns mounting over potential regulatory challenges. The US Transportation Department, which oversees vehicle design approvals, will play a critical role in the future of Tesla’s robotaxi plans, an initiative central to the company’s long-term strategy. Meanwhile, SpaceX, another Musk-led venture, holds around $22 billion in federal contracts that could come under scrutiny if tensions escalate further.