Elon Musk vs Donald Trump: Inside the Growing Rift Between Two Power Players

The fragile alliance between tech titan Elon Musk and President Donald Trump has crumbled—again. Just weeks after their temporary truce, tensions reignited over Trump’s colossal $3.3 trillion domestic spending bill, igniting a high-stakes political feud. 

Musk is attacking what he calls reckless fiscal policy, while Trump threatens to strip away subsidies and investigate Musk’s business empire, including Tesla and SpaceX.

This isn’t just another celebrity spat. The fallout could affect billions in federal contracts, Tesla’s market value, and even U.S. cryptocurrency regulation. 

With Musk openly floating the idea of forming a third political party, the rift has escalated into one of the most consequential political dramas of 2025.

The New Flashpoint: Trump’s “Big, Beautiful Bill”

At the heart of the conflict is Trump’s massive domestic agenda, a bill that would add an estimated $3.3 trillion to the national deficit over the next decade. 

Musk, who recently stepped down from his government role with DOGE (Department of Government Efficiency), is now publicly opposing the legislation and targeting Republican lawmakers who support it.

Musk called out what he sees as hypocrisy: "Every member of Congress who campaigned on reducing government spending and then voted for the biggest debt increase in history should hang their head in shame!" 

His threat? To launch primary campaigns against them—potentially backed by his war chest of campaign cash and vast online following.

Trump Strikes Back: Threats Against Musk’s Empire

Trump didn’t take the attacks lightly. He responded by suggesting that DOGE—an agency Musk once led—should investigate the billions in government contracts awarded to Musk’s companies. “Without subsidies, Elon would probably have to close up shop,” Trump said.

From EV tax credits worth $1.2 billion annually to $2 billion in emissions-related regulatory credit sales, Tesla is heavily influenced by government policy. Trump has floated rolling back emissions standards and terminating EV incentives—policies that could gut Tesla’s bottom line.

Worse yet, Trump ominously hinted at more drastic actions, even jokingly questioning whether Musk should be deported. “DOGE might have to go back and eat Elon,” he quipped—comments that rattled markets and investors alike.

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Wall Street Reacts: Tesla Stock Tumbles

The fallout from the feud has already hit Musk where it hurts: Tesla’s stock. Shares fell 7% on Tuesday after a 2% dip Monday, underperforming a booming S&P 500 and Nasdaq. Since the feud re-emerged in June, Tesla has lost over 14% in market value.

Investors are concerned that Trump’s administration may make good on its threats to reevaluate federal subsidies and contracts. 

According to analysts, the feud is now a “soap opera” distracting Musk from running his companies and dragging Tesla into political crossfire.

Musk’s Political Pivot: Threats and Third Parties

In a flurry of X posts, Musk unveiled campaign-style posters accusing lawmakers of hypocrisy and teased the creation of a new “America Party”, branding it as a populist alternative to Republicans and Democrats. He even vowed to support Rep. Thomas Massie—one of the few Republicans opposing Trump’s bill.

“If this insane spending bill passes, the America Party will be formed the next day,” Musk wrote, stoking speculation about a possible long-term political run.

Musk has the funds to back up his threats. In 2024, he spent over $275 million supporting Trump and GOP candidates through his America PAC. Now, he may use that same firepower to back primary challengers—or shift his support elsewhere.

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Crypto Implications: Could DOGE Regulation Be Weaponized?

While not the central issue, cryptocurrency lies in the shadows of this feud. Musk’s criticism of wasteful spending ties directly to his ambitions with DOGE (not the coin, but the government agency he once led) and his broader fiscal philosophy. 

Trump, in turn, is now using DOGE as a political weapon—threatening to turn the watchdog back on its former creator.

Any tightening of crypto-related policies or scrutiny of Musk’s blockchain ventures like xAI or X payments could ripple into the crypto market. 

Given Musk’s influential role in crypto, particularly Dogecoin and Bitcoin, even the perception of government pressure could spark price volatility—especially among altcoins tied to Musk’s reputation.

What Happens Next?

Despite his influence, Musk isn’t president. And as long as Trump holds that office, Musk’s threats may only go so far. 

While he’s floated political rebellion, launched smear campaigns, and threatened funding shifts, he faces a sobering reality: Trump has the power of the presidency—and the bureaucracy to match.

Whether Musk’s opposition will derail the bill remains to be seen. But the rift is already reshaping investor sentiment, revealing deep fractures in the once-strong Trump-Musk alliance and casting uncertainty over the future of government-tech relations in the U.S.

Read Also: Elon Musk Still Influences Cryptocurrency—Here’s How and Why It Matters

Conclusion

The feud between Elon Musk and Donald Trump is more than a headline—it’s a battle for influence over America’s fiscal future, energy policy, and tech dominance. 

With billions at stake in subsidies, tax credits, and contracts, the clash is likely to intensify. For now, Musk is pushing back hard—but Trump holds the bigger stick.

Whether this spat results in long-term damage to Tesla, regulatory crackdowns on Musk’s ventures, or the birth of a new political movement, one thing is clear: America’s richest man and its president are no longer on the same team.

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FAQ

Why are Elon Musk and Donald Trump feuding?

The feud reignited over Trump’s $3.3 trillion spending bill, which Musk opposes due to its cost and impact on fiscal responsibility.

Will the feud impact Tesla?

Yes. Tesla’s stock has already fallen, and potential loss of EV tax credits and government contracts could cost the company billions.

Is Elon Musk forming a political party? 

Musk has floated the idea of the “America Party” as a populist third party if the spending bill passes.

Could DOGE (the agency) target Musk?

Trump has suggested DOGE could investigate Musk’s subsidies and contracts, potentially increasing regulatory pressure on his companies.

Does this affect crypto markets?

Indirectly, yes. Increased political scrutiny and potential regulations could influence prices—especially for coins Musk is associated with.