Elon Musk's explosive fallout with Trump could lead to Tesla losing billions
Tesla could be set to lose the subsides it earns in government funding
Elon Musk’s explosive fallout with his former pal, President Donald Trump, might lead to Tesla losing billions of dollars.
New reports suggest that subsidies have played a major role in Tesla’s rise into becoming the world’s largest EV manufacturer in recent years but with Trump and Musk no longer on speaking terms, all that might be about to change.
This is according to a report by Sky News, which explained that money made from state subsidies accounted for at least 38% of Tesla’s profits last year.
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It also found that in the first quarter of this year, the firm made ‘$595 million from regulatory credits - almost 50% more than its net earnings of $409m - suggesting that without the subsidy Tesla would be operating in the red’.
Trump has commented publicly about the subsidies, taking to his own social media platform Truth Social to write: “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 to South Africa.”
Speaking to Sky News, Gordon Johnson, who is an investment analyst and prominent Tesla skeptic, said: “The changes that Trump is proposing have significant implications - negative implications - for Tesla’s fundamentals.
“If all of these government programmes were taken away, Tesla would go into losing money and burning cash and the stock would implode.”
The fall out between Musk and Trump started after the SpaceX founder left his post as the head of the Department of Government Efficiency (DOGE).
After Musk described Trump’s ‘Big, Beautiful Bill’ as a ‘disgusting abomination’, the Tesla boss took to X, formerly Twitter, to write: “@realDonaldTrump is in the Epstein files. That is the real reason they have not been made public.
“Mark this post for the future. The truth will come out.”
The post by Musk has since been deleted.
Musk also warned that Trump’s tariffs will ‘cause a recession in the second half of this year’.
In a further post on Truth Social, Trump threatened to cancel Musk’s contracts with the government.
Then, in an interview with NBC News, the president said that Musk has been ‘disrespectful’.
He added: “I think it’s a very bad thing, because he's very disrespectful. You could not disrespect the office of the president.”
Talking about the feud at the time, White House press secretary Karoline Leavitt said: “This is an unfortunate episode from Elon, who is unhappy with the One Big Beautiful Bill [a Republican tax and spending bill] because it does not include the policies he wanted.
“The president is focused on passing this historic piece of legislation and making our country great again.”