President Trump urged a government review of subsidies to Elon Musk’s companies, proposing cost-saving measures by scrutinizing Tesla, SpaceX, and related federal support amid legislative clashes.

In a continuation of their public dispute regarding the impending tax bill, U.S. President Donald Trump hinted that the Department of Government Efficiency (DOGE) should examine the subsidies linked to Elon Musk's enterprises, such as Tesla and SpaceX, to cut costs.

Early one morning, Trump posted on his platform, Truth Social, stating, "Elon may receive more subsidies than anyone in history, and without them, he might have to shut down and return to South Africa. No more launches, satellites, or electric cars, which could save our country a fortune. Perhaps DOGE should have a serious look into this? BIG MONEY TO BE SAVED!!!"

Trump's comments came on Tuesday after Musk criticized a comprehensive tax-cut and spending proposal, which the White House aims to enact by July 4th. Musk vowed to target lawmakers supporting the bill, despite their pledge to limit government spending.

Following Musk's remarks, Senate Republicans narrowly passed Trump's significant tax breaks and spending reductions bill on Tuesday, overcoming Democratic opposition and some internal GOP resistance after a challenging overnight session. The critical vote was 50-50, with Vice President JD Vance resolving the tie.

Musk and Trump Clash Over Legislation

The conflict with Trump could create challenges for Tesla and Musk's broader business ventures. The U.S. Transportation Department, which regulates vehicle design, will be pivotal in deciding if Tesla can produce driverless robotaxis. Concurrently, SpaceX holds about $22 billion in federal contracts.

In June, Trump had previously threatened to reduce Musk's government deals during a social media altercation concerning the bill, which analysts claim will add around $3 trillion to national debt. After minimal public engagement, Musk re-entered the conversation as the Senate debated the bill, labeling it "utterly insane and destructive." On Monday, he criticized lawmakers backing the bill, warning they might face primary losses.

Criticisms of Conflicting Interests

Musk has faced criticism for conflicts of interest during his leadership at DOGE, where he reportedly targeted agencies conducting investigations against his businesses. According to Public Citizen, Musk aimed to slash budgets for entities like the National Highway Traffic Safety Administration, which was probing Tesla, and the FDA, investigating his Neuralink implants. The Defense Department, also facing cuts, is a major contractor for SpaceX, with deals surpassing $22 billion.

Tesla's stock Market Impact

Tesla's stock was adversely impacted amid Trump's post, dropping approximately 6% by 11:00 am ET and about 13% over five days. JP Morgan noted that abolishing the EV tax credit, initially deemed harmless by Musk, could now cost Tesla $1.2 billion annually. Investors remain wary of heightened government scrutiny on Musk's ventures, especially concerning future autonomous technology.

Other markets experienced volatility; while the Nasdaq declined about 1%, and the S&P 500 dipped 0.3%, the Dow Jones Industrial Average rose by roughly 0.6% post-market opening. Musk's additional firms, such as SpaceX, X Corp, and Neuralink, remain privately owned.