President Donald Trump stated on Thursday that he wants Elon Musk and his companies to thrive, clarifying that he doesn’t plan to eliminate federal subsidies for Musk’s companies.
“Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large-scale subsidies he receives,” Trump said in a Truth Social post. “This is not so! I want Elon, and all businesses within our Country, to THRIVE.”
The statement follows Tesla’s second-quarter earnings call, during which the carmaker reported a $1.17 billion decline in profit. Musk warned investors to anticipate “a few rough quarters” as the U.S. government cuts support for EV carmakers.
Here’s why it matters:
For years, Musk’s companies have benefited from billions in federal subsidies and EV tax incentives. Musk and Trump’s public feud has heightened investor concerns. However, the president’s public support may be a sign that tensions between the two former allies are easing.
The elimination of the federal EV tax incentive will undoubtedly make it more difficult for Tesla to move metal. However, the automaker is shifting its focus, placing a big bet on its robotaxi service. In late May, Musk and Tesla’s lobbying team urged federal lawmakers to create a federal framework for autonomous vehicles. It’s in Tesla’s best interest to maintain a decent relationship with federal regulators to accelerate the process.
Key takeaways:
- Trump will not cut Musk’s federal subsidies
Despite a very public falling out over tax policy, President Trump publicly reaffirmed his support for Musk’s ventures and clarified that he has no intention of eliminating federal subsidies for Musk’s companies. - Tesla reported a $1.17 billion profit drop for Q2
The EV maker’s profits declined 16% year-over-year, with deliveries falling 13.5% to 384,122 units. - Tesla is lobbying for federal autonomous vehicle regulations
As it pivots toward a robotaxi future, Tesla is urging lawmakers to establish a national framework for autonomous vehicles to support deployment. - Tesla’s future: robotaxis
With EV incentives being scaled back, Tesla is placing a big bet on autonomous vehicles as a core growth strategy despite regulatory hurdles. - Trump has previously threatened Musk’s subsidies
Although now supportive, Trump had previously hinted at cutting Musk’s subsidies during the height of their public feud. He suggested that the Department of Government Efficiency (DOGE) should examine Musk’s businesses and that there would be “BIG MONEY TO BE SAVED!!!“
