Introduction
The ongoing feud between Elon Musk and President Donald Trump has become a defining feature of the US political and business landscape in 2025. For Tesla, the stakes are high: the outcome of this conflict could reshape the company’s access to crucial government incentives and alter the competitive dynamics of the entire EV industry.
The Political Backdrop
At the heart of the dispute is the proposed “One Big Beautiful Bill Act,” a sweeping tax and spending bill that includes provisions to eliminate the $7,500 federal EV tax credit by September 30, 2025. This credit has been instrumental in making Tesla vehicles more affordable for American consumers and has contributed billions to the company’s revenue. In addition, Tesla has benefited from over $8 billion in regulatory credits, which it sells to other automakers to help them meet emissions standards.
The Public Clash
The conflict escalated in late June, when President Trump publicly accused Musk of receiving “more subsidy than any human being in history,” suggesting that without government support, Tesla would be forced to “close up shop.” Musk, for his part, has pushed back against these claims, arguing that the proposed bill is “utterly insane and destructive” and warning that it could kill millions of jobs. The exchange has played out across social media and traditional news outlets, fueling uncertainty among investors and consumers.
Market and Policy Implications
The immediate impact has been a sharp drop in Tesla’s stock price, which fell 6% following Trump’s latest comments. More broadly, the potential loss of the EV tax credit and regulatory credits poses a significant risk to Tesla’s business model. Analysts estimate that the loss of the tax credit alone could cost Tesla $1.2 billion annually, while the loss of regulatory credit sales could result in an additional $2 billion hit. The broader US EV market could also suffer, as the removal of incentives would make electric vehicles less competitive with traditional gasoline cars.
Strategic Risks and Opportunities
For Tesla, the political uncertainty complicates long-term planning. The company must now prepare for scenarios in which key subsidies are rolled back or eliminated, potentially forcing it to adjust pricing, production, and investment strategies. At the same time, Tesla is ramping up its lobbying and public relations efforts, encouraging owners and supporters to contact their representatives and advocate for continued support of clean energy initiatives.
Owner and Consumer Perspectives
For current and prospective Tesla owners, the policy changes could have immediate financial implications. The loss of the tax credit would increase the effective price of new vehicles, potentially dampening demand. The Tesla community has responded with a mix of concern and activism, with many owners joining advocacy campaigns to preserve EV incentives.
Conclusion
The Musk-Trump conflict highlights the complex interplay between politics and the EV industry. As the debate over subsidies and regulations continues, Tesla owners and investors should stay informed and engaged, recognizing that the outcome will shape the future of electric mobility in the US and beyond.
