The dynamic between former President Donald Trump and tech mogul Elon Musk has escalated into a public spectacle of tensions, possibly signaling an irreparable rift. The catalyst for this fallout was Musk’s open criticism of the new tax plan championed by the White House, prompting Trump to express his disappointment with Musk on Thursday.
“Elon and I had a great relationship. I’m not sure if that continues. I’m surprised and very disappointed because Elon knew the details of the bill better than anyone,” Trump stated from the Oval Office while with German Chancellor Friedrich Merz. Trump hinted that the discord extended beyond just policy disagreements.
“He spoke very kindly of me and hasn’t said anything negative about me personally, but I’m sure that’s next. I’m very disappointed with Elon. I’ve helped him a lot,” Trump added. Despite this, Trump acknowledged Musk’s hard work during their collaboration: “Musk worked hard and did a good job,” emphasizing that it seems Musk misses the Oval Office.
The root of the conflict might be linked to plans to repeal the electric vehicle tax credit, directly affecting Tesla, one of Musk’s flagship companies. Musk quickly responded on his platform, X, clarifying that he had no knowledge of the controversial bill as Trump claimed.
“False. I was never shown this bill, and it was passed overnight so quickly that hardly anyone in Congress even had a chance to read it!” Musk declared. “Without me, Trump would have lost the election, Democrats would have controlled the House, and the Republicans would have been left with a 51-49 Senate,” the billionaire, who contributed a whopping $250 million, asserted. He ended with, “Such ingratitude!” highlighting the split in what was once a crucial partnership for the administration.
The Public Clash and Market Reaction
Musk, who has been fervent about the issue on X, even shared a video from friendlier times with Trump, specifically from a March day at the White House gardens alongside a Tesla car. “Remember this?” he asked, referring to Trump’s past positive remarks.
The fracture became more apparent when Musk recently criticized the tax plan, calling it a “disgusting abomination” and criticizing Republicans who backed it in the House. He warned that the plan would “massively increase the already giant budget deficit to $2.5 trillion (!!!) and burden U.S. citizens with devastatingly unsustainable debt.”
Trump, not limited to the Oval Office, took to his social media platform, Truth Social, to voice his opinion on Musk, implying he fired him. “I removed his electric vehicle mandate that forced everyone to buy unwanted electric cars (and he knew for months I was going to do it!), and he just went CRAZY,” Trump claimed.
Trump also said Musk was “burned out” by the end of his tenure at the Department of Government Efficiency (DOGE). “I asked him to leave,” he concluded, referring to Musk’s departure from the role.
Tesla Takes a Hit
The heated exchange quickly impacted the markets. On Thursday, Tesla’s stock plummeted by 8.64% on the New York Stock Exchange, closing at $303.35 per share. This significant drop was attributed to uncertainties stirred by the public spat between Musk and Trump, as well as concerns that the new tax plan might eliminate key incentives for the electric vehicle industry.
The Controversial Tax Bill
Dubbed by the president as “The Big, Beautiful Bill,” the tax proposal aims to extend the tax cuts from Trump’s first term (2017-2021) and introduce new measures such as tax exemptions for tips, overtime, and purchases of American-made vehicles. The bill narrowly passed the House of Representatives with 215 votes in favor and 214 against, thanks to Trump’s intense pressure on undecided lawmakers. It is currently under Senate debate, with hopes of passing before July 4th.
The clash between Donald Trump and Elon Musk illuminates much more than a mere tax policy dispute. It underscores the tenuous nature of strategic alliances in an environment where loyalties can dissolve as quickly as they are built, as this situation has starkly demonstrated.
Key Insights on the Trump-Musk Dispute
What triggered the fallout between Trump and Musk?
The fallout was triggered by Musk's criticism of Trump's new tax plan, which Musk described as a "disgusting abomination".
How did the conflict affect Tesla?
Tesla's stock fell by 8.64% due to concerns over the public conflict between Musk and Trump and fears that the tax plan could eliminate key incentives for electric vehicles.
What did Trump claim about Musk's involvement with the tax bill?
Trump claimed that Musk was aware of the tax bill details better than anyone, though Musk denied ever being shown the bill.