Tesla shares dropped sharply on Tuesday after US President Donald Trump launched a public attack on Elon Musk, suggesting the federal government should investigate subsidies received by the tech billionaire's companies.
According to reports, Tesla's stock slid more than 5% by the end of the trading day, with market watchers pointing to concerns about potential cuts to federal support.
In a late-night post on his Truth Social platform, President Trump wrote, 'Elon may get more subsidies than any human being in history, by far, and without subsidies, Elon would probably have to close up shop and head back home to South Africa... Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!'
The post referred to the Department of Government Efficiency (DOGE), which Musk briefly headed during Trump's earlier term in office, before stepping down in May this year.
Old Allies, New Conflict
Once aligned on cutting government waste, Trump and Musk are now locked in an unusually public feud. The falling out comes as Musk ramps up criticism of Trump's signature tax and spending bill, which could slash electric vehicle incentives and reshape the financial foundation of Tesla.
At the White House, Trump has appeared increasingly irritated by Musk's outspoken opposition. Speaking to reporters on Tuesday morning, he warned, 'Elon can lose a lot more than just his EV mandate.'
Later, he added, 'We might have to put DOGE on Elon... DOGE is the monster that might have to go back and eat Elon.'
DOGE (Department of Government Efficiency) was created early in Trump's current term to target wasteful spending. Musk headed it for over a year before resigning in late May. Now, it could become the instrument of his undoing.
Musk Hits Back at Trump
On the other hand, Musk has not taken the threat from the president and his former ally lightly. While resisting the urge to escalate further, he has made it clear that he no longer supports either of the two major political parties. On Monday, he floated the idea of a 'new political party that actually cares about the people' and slammed Trump's spending plan as 'insane.'
Responding directly to Trump's subsidy claim, Musk posted on X (formerly Twitter), 'I am literally saying CUT IT ALL. Now.'
Despite Musk's efforts to frame his criticism as a principled stance against government waste, some in Washington see his opposition to the spending bill as self-interested. The proposed legislation includes deep cuts to green energy initiatives, a sector on which Tesla and SpaceX heavily depend.
Markets Get Jittery
Meanwhile, investors have not taken the feud lightly either. Dan Ives, an analyst at Wedbush Securities, told Associated Press that the political fallout could pose longer-term risks for Tesla's federal contracts and incentives.
'We would expect the stock to be weak to kick off trading this morning,' Ives noted. 'The Street will show concern that the Trump and Musk once-BFF relationship now backfires and turns into a junior high school friendship gone bad.'
The broader fear that the experts point towards is that Tesla, long seen as a beneficiary of friendly federal policies, may now face a hostile White House just as global competition in electric vehicles intensifies.
Trump has not confirmed whether any formal investigation by DOGE is underway, but his repeated remarks and social media attacks suggest that pressure on Musk is likely to build. When asked whether he would consider deporting Musk, the president shrugged, 'We'll have to take a look.'
While Musk is a naturalised US citizen, the comment underscored how far the relationship between the two men has deteriorated.
Ultimately, it's fair to say that Tesla's market is expected to bear the cost of a potential political breakup that may reshape the future of one of America's most influential tech giants.
