“Elon Musk has fiercely criticized U.S. President Donald Trump’s tax bill, calling it “insane and destructive” for slashing electric vehicle (EV) tax credits. The bill, passed by the Senate, ends the $7,500 EV credit by September 2025, threatening Tesla’s sales and the broader EV industry. Musk’s feud with Trump escalates, with the billionaire threatening to form a new political party.”
Musk’s Fierce Opposition to Trump’s Tax Bill
Elon Musk, CEO of Tesla Inc., has unleashed a scathing critique of U.S. President Donald Trump’s multitrillion-dollar tax and spending bill, labeling it “utterly insane and destructive” in posts on his social media platform X. The bill, narrowly passed by the Senate on July 1, 2025, with a 51-50 vote, includes provisions to eliminate the $7,500 consumer tax credit for new electric vehicles (EVs) and a $4,000 credit for used EVs by September 30, 2025. This accelerated timeline, stricter than the earlier House proposal to phase out credits by year-end, has ignited a public feud between Musk and Trump, once close allies.
Musk argues that the removal of EV tax credits will devastate the U.S. EV industry, a cornerstone of clean energy innovation. He claims the bill prioritizes “handouts to industries of the past” while severely damaging future-focused sectors like electric vehicles, potentially costing millions of American jobs. The Tesla chief’s criticism extends beyond EVs, warning that the bill’s $3.3 trillion addition to the national debt could lead to “debt slavery” and economic ruin. Musk’s rhetoric peaked when he threatened to launch a new “America Party” if the bill becomes law, targeting lawmakers who supported it despite campaigning on fiscal restraint.
Trump fired back on July 1, 2025, accusing Musk of benefiting from “more subsidies than any human being in history.” In a Truth Social post, Trump suggested that without federal support, Musk might need to “close up shop and head back home to South Africa.” He also hinted at deploying the Department of Government Efficiency (DOGE), previously led by Musk, to scrutinize subsidies for Tesla and SpaceX, including $22 billion in federal contracts. Trump reiterated his long-standing opposition to the Biden-era EV mandate, calling it “ridiculous” and a key campaign issue.
The Senate’s decision to expedite the EV credit cutoff has broader implications for the U.S. auto industry. The $7,500 credit has been pivotal in making EVs like Tesla’s Model 3, priced around $40,000, affordable for middle-class buyers. Its removal could increase EV costs, potentially stifling adoption and impacting suppliers, dealerships, and charging infrastructure firms. Smaller EV players like Rivian and Lucid Group saw their shares drop by 2% and 3.8%, respectively, on July 1, 2025, reflecting market concerns.
Musk’s stance marks a shift from his earlier comments in July 2024, when he suggested that ending EV subsidies could benefit Tesla by weeding out weaker competitors. However, the abrupt policy change and its potential to disrupt Tesla’s $406.5 billion valuation have evidently altered his perspective. The feud has also caused volatility in Tesla’s stock, with a 6% premarket drop on July 1, 2025, though shares later recovered.
The bill’s passage has drawn criticism beyond Musk. Senators Rand Paul and Thom Tillis, both Republicans, opposed it, citing concerns over a $5 trillion debt ceiling increase and $38.9 billion in Medicaid cuts for North Carolina, respectively. Meanwhile, Democrats have slammed the bill for favoring tax cuts for the wealthy while reducing food and healthcare aid for lower-income Americans. As the House and Senate reconcile their versions of the bill, Musk’s vocal opposition and threats of political action continue to fuel debate, highlighting a deepening rift with Trump and raising questions about the future of U.S. clean energy policy.
Disclaimer: This article is based on recent news reports, statements from public figures, and posts on X, sourced from reputable outlets like Bloomberg, Reuters, India Today, and Hindustan Times. Information is accurate as of July 2, 2025, but subject to change as new developments emerge. All India Press does not endorse any political stance or party mentioned in this report.