The temporary truce between Elon Musk and Donald Trump swiftly disintegrated after the Senate’s approval of Trump’s substantial domestic policy bill, sparking Musk’s declaration to utilise his wealth to challenge Republican Congress members who supported it. Musk voiced his opposition vehemently on social media, particularly criticising the bill’s exorbitant cost, claiming it would exacerbate government debt.
Trump retaliated by suggesting an investigation into the significant government subsidies received by Musk’s companies. The ongoing feud lacks the vitriol of previous altercations, during which Musk made unsubstantiated claims relating to Trump and the controversy surrounding Jeffrey Epstein. While Musk recently retracted some of his critical comments about Trump, he has reverted to his antagonistic stance regarding the funding legislation.
As Musk increased his critiques, Tesla’s stock plummeted nearly 5 per cent, exacerbating investor anxieties about the repercussions of the Musk-Trump conflict. Stakeholders, particularly concerned about potential threats to contracts with SpaceX and Tesla from Trump, reacted negatively to the renewed tensions, leading to significant stock value declines.
Musk’s objections to the bill stem from its projected addition of approximately $3.3 trillion to the deficit over the next decade, a figure he believes contradicts claims from the White House that the bill will reduce fiscal burdens. He disparaged Congress members voting for the bill, stating they should be ashamed and signalling he would target them in upcoming primaries.
In response to the potential passage of the bill, Musk proposed the formation of a third party, the “America Party,” as a populist alternative to current political options, should the bill succeed. He also pledged support for Representative Thomas Massie, one of the few congressional Republicans opposed to the legislation.
Trump, in a striking retort, alluded to an investigation of Musk’s enterprises. He raised concerns over the reliance of Musk’s businesses on government support, suggesting that without it, Musk’s ventures could collapse.
Despite Musk’s insistence that his opposition isn’t motivated by the EV tax credit implications in the bill, analysts speculate this is a factor in his staunch resistance. The potential loss of these credits could severely impact Tesla’s finances, which rely on both regulatory credit sales and the tax credits for consumers, worth billions over the last few years.
Overall, the confrontation highlights the precarious balance Musk must maintain in navigating his political aspirations and the implications for his businesses, especially when faced with Trump’s considerable influence over the Republican base. While Musk’s financial capacity to back alternative candidates is substantial, his past political endeavours show mixed results.