Trump denies wanting to destroy Elon Musk’s companies as Tesla shares plunge

Donald Trump denied he was seeking to ruin the business empire of his onetime ally Elon Musk as retribution for their dispute over the US president’s signature tax law.

“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 US Government. This is not so! I want Elon, and all businesses within our Country, to THRIVE,” Trump posted Thursday on social media, though it was unclear exactly what comments he was responding to.

Elon Musk and Donald Trump in happier times.Credit: AP

“The better they do, the better the USA does, and that’s good for all of us. We are setting records every day, and I want to keep it that way!” the president added.

Shares of Tesla lost more than 8 per cent in New York during the first trading session since the company reported a steep drop in revenue and Musk warned of difficult times ahead for his electric vehicle maker. The stock had declined 18 per cent this year through Wednesday’s close.

The comments mark the latest twist in the tumultuous relationship between two of the world’s most powerful figures, after a falling out that has led Musk to unleash a barrage of attacks on Trump and float the creation of a new political party. The president in response threatened to terminate Musk’s government contracts and subsidies.

Both men subsequently moved to make amends, but the damage was done to Musk’s business interests. In a quarterly earnings statement on Wednesday, Tesla cited the loss of electric vehicle subsidies and increased tariffs – both Trump policies – as two headwinds for its car-making and energy businesses.

Musk on Wednesday warned that the EV maker would be in transition for the next year after losing tax incentives in the US and needing time to roll out autonomous vehicles.

“We probably could have a few rough quarters,” Musk said.

Tesla chief financial officer Vaibhav Taneja also said on Wednesday that Trump’s fiscal package has “certain adverse impacts” on its energy business, most notably on residential storage because of the early expiration of consumer tax credits.

“The challenges of the storage business, therefore, remain both from the bill and from tariffs, and we’re doing our best to try and manage through this. But it will – we will see shifts in demand and profitability,” Taneja said on an earnings call.

Tesla shares fell sharply after the company’s latest results.Credit: Bloomberg

Tariffs increased costs by about $US300 million ($454 million) to the company’s automotive and energy businesses in the second quarter, Taneja added, with costs expected to increase in the coming quarters.

Musk in May left his government post, in which he oversaw the Trump’s government cost-cutting initiative to return to his companies, which have many links to the US government.

SpaceX is a key government contractor with both the National Aeronautics and Space Administration and the US military. Tesla, which accounts for the bulk of Musk’s wealth, for years has benefited from a $US7500 tax credit for EV purchasers, as well as the sale of regulatory credits that rival car makers purchase to comply with federal tailpipe emissions and fuel economy standards.

Tump’s fiscal package signed into law on July 4 undercut both of those support mechanisms. It eliminated civil penalties that automakers had been required to pay US regulators that oversee US fuel economy requirements.

During their dispute, Musk threatened to decommission SpaceX’s Dragon spacecraft, a vital capsule that NASA uses to send astronauts and supplies to the International Space Station.

Musk later walked back the threat and SpaceX continues to launch Dragon vehicles.

The Trump-Musk feud became intensely personal at its peak, with the world’s wealthiest man posting (then deleting) a claim on X that Trump’s name appeared in files related to the late, disgraced financier and sex offender Jeffrey Epstein and that the White House had covered it up.

Those accusations have taken on a new significance as Trump has become embroiled in a controversy over his handling of the Epstein documents, which has provoked the wrath of some of his own supporters who say the president’s team has gone back on its vow for transparency.

A Republican-led House committee subpoenaed Epstein’s convicted accomplice, Ghislaine Maxwell on Wednesday to testify next month, while The Wall Street Journal reported that Attorney General Pam Bondi “informed the president at a meeting in the White House that his name was in the Epstein files” along with “many other high-profile figures”.

“This is nothing more than a continuation of the fake news stories concocted by the Democrats and the liberal media,” White House Communications Director Steven Cheung said in a statement in response to the Journal report.

Bloomberg

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