US President Donald Trump has denied claims that he wants to destroy Elon Musk’s companies by taking away their US government subsidies. The denial comes as a response to Trump’s earlier threat to cut some of the contracts between Tesla and the US government, which Musk opposed due to his disagreement with Trump’s “big beautiful bill”.
In June, the president threatened to take away some of Musk’s government subsidies amid their feud over a major tax spending bill. Musk had previously headed Trump’s Department of Government Efficiency and funneled hundreds of millions of dollars into Trump’s reelection campaign.
Musk has continued to criticize Trump’s relationship with convicted sex offender Jeffrey Epstein, which sparked their public spat. The tech CEO also warned that Tesla could experience a “few rough quarters” due to tariff costs and the expiration of federal electric vehicle benefits at the end of September.
The US government has awarded contracts worth up to $200 million each to several artificial intelligence startups, including Musk’s xAI. However, White House press secretary Karoline Leavitt suggested that the administration doesn’t want federal agencies to work with xAI.
Musk’s aerospace and defense contractor SpaceX also has massive contract exposure in the US. The reusable rocket maker has received over $22 billion from work with the federal government since 2008. The Trump administration recently reviewed SpaceX contracts, but found most were critical.
Tesla has reported significant revenue from selling “automotive regulatory credits” or environmental credits. However, the company warned that regulatory credit sales could negatively impact its financial results due to the loss of tax credits and carbon offset mechanisms under Trump’s “One Big Beautiful Bill Act”.
Source: https://www.cnbc.com/2025/07/24/trump-musk-subsidies.html