Elon Musk has never been shy about his disdain for big government. And yet, many of Musk’s companies have thrived thanks to government subsidies, tax credits, and federal contracts. The same “handouts” he often derides are, in many ways, the lifeblood of his business empire.
The tension came to a head on June 3, when Musk took to X to denounce the “big, beautiful bill,” a proposal aimed at eliminating EV tax credits and slashing clean energy funding. He called the legislation a “disgusting abomination.”
I’m sorry, but I just can’t stand it anymore.
— Elon Musk (@elonmusk) June 3, 2025
This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination.
Shame on those who voted for it: you know you did wrong. You know it.
President Trump, never one to let criticism slide, hit back hard. In a Truth Social post, he accused Musk of being self-serving and reliant on “billions and billions of dollars” in federal aid. He even threatened to strip Tesla (NASDAQ: TSLA) and SpaceX of their subsidies and contracts.
Tesla’s stock was down over 14% at market close on June 5 following the spat, wiping out more than $150 billion in market cap. Investors, already jittery over slowing EV demand and rising competition, were now facing the prospect of a Tesla without its government safety net.
Tesla’s rising reliance on regulatory credits
In fact, Tesla’s reliance on regulatory credits has been increasing over the years:
| Period | Regulatory credit revenue | Net income (profit) | Credits as % of net income |
| Q1 2025 | $595 million | $409 million | 145% |
| Q1 2024 | $442 million | $1.39 billion | 31.8% |
| FY 2024 | $2.76 billion | $7.09 billion | 38.9% |
| FY 2023 | $1.79 billion | $14.99 billion | 11.9% |
| FY 2022 | $1.78 billion | $12.56 billion | 14.2% |
And, then there’s the federal EV tax credit, also targeted in Trump’s proposed bill, which can shave up to $7,500 off consumers’ purchase prices. This credit is a huge boost to Tesla’s sales, especially as its vehicles grow more expensive and new competition undercuts them on price.
As we can see, these credits have become an increasingly needed source of profit. Tesla’s bottom line isn’t just driven by innovation or sleek product design. It’s also powered by policy. And that makes the company, and Musk himself, far more vulnerable to Washington’s shifting winds than he’d like to admit.
Featured image via Shutterstock.
