Elon Musk could use a win after Tesla’s weak second-quarter earnings, and he sort of got it when President Donald Trump proclaimed he wasn’t going to use the power of the presidency to destroy his businesses.
Stepping away from the front lines of his ongoing feud with the world’s richest man and owner of social media network X (Twitter), Trump took to his personal social media network, Truth Social, to let everyone know that, despite what you may have heard, he’s not intent on crushing Musk’s empire by taking away all the government subsidies that benefit Tesla, SpaceX, and the rest of Musk’s ventures.
“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large scale subsidies he receives from the U.S. Government,” Trump said in his post. “This is not so! I want Elon, and all businesses within our Country, to THRIVE.”
Either way, it didn’t move the corporate value needle much for Tesla, Musk’s only public company and a major beneficiary of considerable subsidies for electric vehicles that Trump and congressional Republicans killed in the most recent budget reconciliation bill.
Tesla announced disappointing earnings last night, and Musk said on the call that Trump’s budget was going to be a problem for Tesla as EV purchase credits expire in September.
“We are in the transition period where we will lose a lot of incentives in the US,” Musk said on last night’s call. “We probably could have a few rough quarters.”
The amount of money Tesla earned from selling these credits to companies that need help complying with emissions standards amounted to $439 million during the quarter. That’s an amount equal to nearly half of the buggy-maker’s operating income of $923 million. Tesla shares dropped around nine percent when markets opened this morning and only recovered slightly by day’s end.
Aside from Tesla, Musk’s SpaceX relies heavily on federal funding, with tens of billions in government contracts in recent years.
Muskland had good reason to worry: Trump floated the idea of cutting off subsidies to Musk’s companies during their slap fight last month, which began when Musk slammed the proposed budget bill as pork-filled.
“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts,” Trump said at the time. “I was always surprised that Biden didn’t do it!”
Now it looks like Elon can rest easy that his government contract empire remains unthreatened – maybe. That post from Trump could also be read to mean the President doesn’t think terminating Musk’s subsidies would harm his businesses – Trump doesn’t formally say he isn’t going to terminate subsidies, and it looks like he’s at least thought about it.
We reached out to the White House to get clarification, and the press office declined to comment beyond Trump’s post. ®