Once close allies, now at odds: Elon Musk’s once-robust relationship with Donald Trump appears to be crumbling amid growing policy clashes, public criticism, and mounting fallout for Musk’s companies. The turning point seems to be Trump’s so-called “Big Beautiful Bill,” a sweeping Republican legislative package that Musk claims undermines innovation and economic discipline.
Here’s a breakdown of the key reasons behind the falling out:
1. Tesla’s EV Tax credits in jeopardy and disagreement over the ‘Big Beautiful Bill’
Elon Musk’s sharp break from Donald Trump finds its most immediate pain point in Tesla’s bottom line: the proposed elimination of federal electric vehicle (EV) tax credits.
Under current policy, buyers of new EVs are eligible for up to $7,500 in federal tax credits, with an additional $4,000 available for used EVs. These credits, part of the Biden-era Inflation Reduction Act, have been a critical incentive driving EV adoption—and by extension, Tesla’s sales.
But Trump’s so-called “Big Beautiful Bill,” backed by GOP lawmakers, aims to gut those incentives entirely for manufacturers that have already sold over 200,000 qualifying vehicles between 2009 and 2025. Tesla, by far the EV market leader, is directly in the firing line: the company sold over 336,000 vehicles in just Q1 of 2025 alone.
According to JPMorgan analyst Ryan Brinkman, the removal of these credits could represent a $1.2 billion headwind for Tesla—a significant blow as the company battles slumping demand, falling profits, and political backlash from Musk’s government role.
So, Musk became increasingly vocal in criticising Trump’s massive federal spending bill—nicknamed the “Big Beautiful Bill.” Musk called the bill “a disgusting abomination” and accused GOP lawmakers of abandoning fiscal responsibility.
“I was disappointed to see the massive spending bill, frankly… which increases the budget deficit… I don’t know if a bill can be big and beautiful,” Musk told CBS previously.
2. Ally Jared Isaacman not being considered as NASA Administrator
Musk’s discontent escalated after Trump abruptly withdrew the nomination of private astronuat and his ally Jared Isaacman—as NASA Administrator. Trump cited “prior associations” in his decision, which Musk might have seen as a betrayal. Isaacman had broad support in the space community and was seen as Musk’s pick to align NASA policy with SpaceX’s interests. His removal coincided with Musk’s own exit as a “special government employee” running the Department of Government Efficiency (DOGE).
“It is rare to find someone so competent and good-hearted,” Musk said in support of Isaacman, signaling the depth of his frustration.
3. Musk’s reputation bruised amid fallout from DOGE role and federal spending cuts
Elon Musk’s foray into federal governance as a “special government employee” under the Trump administration has left a lasting dent in his personal and public image. What began as a high-profile effort to “streamline government efficiency” quickly turned into a political and reputational minefield for the billionaire CEO.
As head of the Department of Government Efficiency (DOGE), Musk was tasked with cutting what the Trump administration called “wasteful spending.” But the resulting actions—including mass layoffs in federal departments, rumored threats to Social Security and Medicare programs, and abrupt budget slashes—sparked widespread backlash.
Despite Musk’s repeated clarifications that DOGE had no authority over entitlement programs, public anger snowballed.
“It’s a bit unfair because DOGE became the whipping boy for everything,” Musk told CBS.
“I’ve had people think DOGE is going to stop them from getting their Social Security check, which is completely untrue.”
4. Reputation under fire and impact on Tesla
The political blowback triggered a sharp decline in Musk’s public approval. Protests, online campaigns, and lawsuits followed, along with a string of death threats and acts of violence targeting both Musk and Tesla facilities. As public anger grew, Tesla became a target:
- Showrooms were vandalised
- Tesla vehicle sales plummeted
- Shares fell 50% from record highs
- Net worth dropped by $100 billion
Musk lamented being made the scapegoat: “DOGE became the whipping boy for everything… People thought it would stop their Social Security checks.”
His candid remarks reflect a man caught between two identities—visionary entrepreneur and political appointee. “I don’t want to speak up against the administration,” he said, “but I also don’t want to take responsibility for everything this administration is doing.”
5. Musk’s Starlink and FAA contract conflict adds tension
Musk recently escalated pressure on the FAA to drop Verizon’s $2.4 billion contract for air traffic control upgrades, claiming the system is failing. He offered Starlink as an emergency solution, suggesting the FAA should shift the contract to SpaceX.
But critics flagged this as a possible conflict of interest—especially since Musk had been advising on federal spending.
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