Tesla shares fell by over 5% on July 1, 2025, after former US President Donald Trump publicly questioned the billions in subsidies given to Elon Musk’s companies, calling for scrutiny by the federal Department of Government Efficiency (DOGE). The controversy reignites tensions between Trump and Musk amid ongoing debates over green energy funding and political alignment.
Tesla Inc., the electric vehicle giant headquartered in Austin, Texas, saw its shares fall by 5.3% on July 1 after former US President Donald Trump criticized the extensive federal subsidies received by Elon Musk’s companies. The remarks, made via a late-night post on Truth Social, sparked immediate reactions across political and financial circles.
Trump alleged that Musk may have received “more subsidy than any human being in history,” and suggested that, without such government support, operations like SpaceX and Starlink would be unsustainable. He urged the Department of Government Efficiency (DOGE) to investigate the matter, stating, “BIG MONEY TO BE SAVED!!!”
“Perhaps we should have DOGE take a good, hard look at this?” Trump wrote, referring to the government agency Musk briefly led before stepping down in late May 2025.
The sell-off in Tesla shares comes amid an already volatile environment for the automaker. Although Tesla had seen a recovery of over 11% since early June following a previous public dispute between Trump and Musk, this new controversy reignites investor uncertainty.
Musk quickly responded on X (formerly Twitter), stating, “I am literally saying CUT IT ALL. Now.” He continued criticizing both political parties and the tax and spending bill currently being debated in Congress. The proposed legislation includes significant cuts to green energy subsidies and would raise the federal deficit compared to existing law.
The tension appears to mark a turning point in Musk’s relationship with political leadership. Although Musk campaigned with Trump in the 2024 presidential race, he has recently distanced himself from the Republican Party, even calling on X for the creation of a “new political party that actually cares about the people.”
Musk’s other companies, including SpaceX and Starlink, which rely on favorable government policies for contracts and operations, could also face increased scrutiny if Trump’s call is acted upon.
As the debate over green energy and federal spending intensifies, market watchers are closely monitoring the impact of politics on publicly traded companies like Tesla. For now, the stock market has reacted with caution, reflecting growing uncertainty over Musk’s political alignment and future federal support.