- Trump suggests DOGE should scrutinize subsidies to Musk's companies, claiming potential federal savings.
- Musk criticizes Trump-backed legislation, vows to support primary challenges against aligned lawmakers.
- Tensions escalate as Trump highlights Musk's reliance on subsidies, while Musk advocates for cutting all government subsidies.
Trump Takes Aim at Musk's Federal Subsidies
President Donald Trump has publicly called for the Department of Government Efficiency (DOGE) to review federal subsidies received by Elon Musk's companies, including Tesla and SpaceX. Trump claims this could save the government "BIG money," escalating a feud that began when Musk criticized recent Trump-backed tax and spending legislation as "utterly insane and destructive."
Musk, who has historically relied on federal contracts and incentives for Tesla's electric vehicles and SpaceX's aerospace projects, fired back by advocating for the elimination of all government subsidies. "If we’re cutting subsidies, let’s cut them all," Musk said, doubling down on his criticism of Trump's policies.
Subsidies Under Scrutiny
Tesla, already facing declining global sales, could be particularly vulnerable to subsidy cuts, while SpaceX's reliance on high-value government contracts—especially in defense and telecommunications—puts it in the crosshairs of DOGE's cost-cutting mandate. Recent policy shifts, including changes to broadband contract eligibility, have already benefited SpaceX's Starlink, but Trump's latest remarks suggest a potential reversal.
"When you look at the numbers, it’s clear where the waste is," Trump said, without providing specifics. People familiar with the matter say DOGE is preparing a preliminary review of contracts tied to Musk’s ventures, though no formal action has been taken.
Political and Market Fallout
The public spat has drawn sharp reactions from both sides of the aisle, with some lawmakers defending subsidies as critical for U.S. competitiveness in EVs and space technology, while others echo Trump’s call for austerity. Markets reacted cautiously, with Tesla shares dipping slightly in after-hours trading.
Analysts warn that aggressive subsidy cuts could force Musk to scale back operations, potentially weakening U.S. leadership in key tech sectors. "This isn’t just about Tesla or SpaceX—it’s about whether the government should be in the business of picking winners," said one industry insider, who asked not to be named due to the sensitivity of the topic.
This story is developing. Updates will follow as more details emerge.