U.S. President Donald Trump has pushed back against speculation that his administration intends to strip subsidies and federal contracts from Elon Musk’s companies, including Tesla and SpaceX.
In a Truth Social post on Thursday, Trump stated he has no desire to “destroy” Musk’s businesses and instead wants them to “THRIVE like never before.”
The comments come after weeks of escalating tension between Trump and Musk, sparked by the president’s controversial “One Big Beautiful Bill Act” (OBBBA), a tax and spending package that could significantly impact electric vehicle (EV) incentives. In June, Trump threatened to review and potentially cut contracts tied to Musk’s companies, prompting a heated public exchange with the Tesla CEO.
“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. This is not so!” Trump wrote. “The better they do, the better the USA does, and that’s good for all of us.”
The ongoing feud comes at a challenging time for Tesla. On Wednesday, the automaker reported a 12% drop in revenue and a 16% decline in net income for the second quarter. Deliveries also fell by 14%, sending Tesla’s stock tumbling nearly 9% in after-hours trading. Musk acknowledged on the company’s earnings call that Tesla could see “a few rough quarters” as subsidies phase out and tariffs increase.
In addition to Tesla, SpaceX is heavily tied to U.S. government contracts, having secured more than $22 billion since 2008 for projects with NASA, the U.S. Air Force, and Space Force. Recently, the Pentagon awarded Musk’s AI startup, xAI, a $200 million contract as part of a broader push into defense-focused artificial intelligence.
Despite these contracts, the Trump administration has reportedly reviewed SpaceX’s agreements to identify potential cuts, though most were deemed critical.
Musk, who previously supported Trump and contributed to his reelection campaign, has openly criticized the president’s budget policies, calling them a “disgusting abomination” on social media. He also warned that Tesla’s profitability could be hurt by OBBBA’s provisions affecting battery costs and consumer demand.
