Whatsapp Facebook Twitter The legislation has reportedly triggered a furious reaction from Musk, raising questions about whether his political gamble is backfiring — and whether his outrage is personal or purely financial, according to a report As Trump pushed to get the bill passed in Congress this week, Musk called it an “abomination” and warned that he might go after lawmakers who support it by funding their opponents — or even start his own political party. In response, Trump shot back, saying that “without subsidies, Elon would probably have to close up shop and head back home to South Africa.” Their escalating feud threatens critical parts of Musk’s business empire — and leaves Republican legislators caught in a tussle between the US president and the world’s richest man. “All family fights are ultimately about money,” Financial Times quoted San Francisco-based tech entrepreneur Trevor Traina, who served as ambassador to Austria during Trump’s first term, as saying. “This one seems to be no different . . . Billions in subsidies versus hundreds of millions in primaries,” Traina added. Musk publicly slammed bill Publicly, Musk has criticised Trump’s fiscal bill for its impact on the US deficit, but the real danger lies in what it means for Tesla’s bottom line, according to Financial Times. STORY CONTINUES BELOW THIS AD The bill threatens to dismantle all three of the country’s emissions credit systems — including those run by the Environmental Protection Agency, the state of California, and the federal Corporate Average Fuel Economy (CAFE) standards. These programmes are essential to Tesla’s profitability. They reward companies that produce low or zero-emission vehicles by allowing them to sell credits to less efficient automakers. If the bill passes, that revenue stream could vanish. In the first quarter of 2025, Tesla made $595 million from credit sales — more than its total net income of $409 million, meaning it would have reported a loss without them. Last year, Tesla earned $2.8 billion from selling regulatory credits, up from $1.8 billion in 2023, accounting for 39 percent of its $7.1 billion in annual net income. Since 2015, those credit sales have brought in more than $11 billion — a financial cushion now directly under threat. The budget bill negates Cafe by setting fines at zero. Tesla worries that traditional automakers will largely stop buying credits as a result, reported FT, citing people familiar with the company’s internal debates. STORY CONTINUES BELOW THIS AD “If there’s no penalty for cheating, there’s no reason to buy compliance credits,” FT quoted Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, as saying. “I’m not sure how costly these (changes) will be compared to the damage that Musk did to Tesla by becoming Trump’s Tweedle Dee and a pariah,” he added. Tesla’s credit profits Tesla doesn’t disclose where its regulatory credit profits come from, but insiders say up to 75% are from US programmes now under threat from Trump’s new bill. While existing multiyear contracts may delay the financial hit, some deals could be voided due to clauses tied to legal changes, reported FT. Tesla will still earn from credit sales abroad, including a new EU emissions pooling deal with automakers like Stellantis and Toyota, potentially worth over €1 billion. But in the US, the outlook is bleak. Trump’s bill guts federal emissions credit systems, and while California is suing to protect its own program — where Tesla holds the most credits — the long-term market has collapsed. STORY CONTINUES BELOW THIS AD Beyond credits, the bill strips away nearly all federal support for Tesla’s broader business: EV tax credits, manufacturing incentives, charging infrastructure, and solar energy subsidies. Only energy storage incentives remain. The loss of the $7,500 EV credit alone could hit sales hard when it ends in September. In response to Musk’s criticism, Trump mocked Tesla’s reliance on subsidies and threatened to cancel federal contracts with both Tesla and SpaceX. He also accused Musk of hypocrisy, citing Musk’s own Department of Government Efficiency (Doge), which Musk left in May amid rising tensions. Tariffs and a looming trade war with China further endanger Tesla’s supply chain and margins. A former Tesla executive summed it up: “This is a devastating blow — not just CAFE, but everything: tariffs, tax credits, manufacturing, charging, and solar. Elon’s waking up, but it’s too late.” Despite Musk’s threat to fund primary challenges against Republican supporters of the bill, few have broken ranks. The legislation passed with 50 of 53 GOP senators backing it, and a tiebreaker from VP JD Vance. Even some of Musk’s former allies now support the bill, citing the importance of preventing tax hikes. STORY CONTINUES BELOW THIS AD The bill passed Congress on Thursday and heads to Trump’s desk. As one Trump ally put it: “I respect Elon, but Trump carries the bigger stick.” With inputs from agencies