Tesla Inc. (NASDAQ:TSLA) saw its stock price fall sharply in premarket trading on Tuesday as the feud between U.S. President Donald Trump and Tesla CEO Elon Musk intensified. Trump accused Musk of benefiting excessively from government subsidies and called for a federal probe into the support Tesla has received.
Data from Robinhood (NASDAQ:HOOD) showed Tesla shares dropping as much as 6.4%, hitting $297.35 in early trading hours.
On his social media platform, Truth Social, Trump demanded that the Department of Government Efficiency (DOGE) launch an investigation into the scale of federal aid provided to Tesla. He warned, “Elon may be receiving more subsidies than anyone in history.”
Trump added, “Without these subsidies, Elon might have to shut down operations and return to South Africa.”
Musk quickly fired back on X, stating, “I’m literally saying CUT IT ALL. Now.”
The dispute stems largely from Musk’s outspoken criticism of a broad tax and spending cut bill that Trump supports and is currently being debated in the Senate. Musk argues the legislation could sharply increase federal debt and spending and might obstruct his ongoing collaboration with DOGE to trim government expenses.
Independent evaluations estimate that, if passed as-is, the bill could add around $3.3 trillion to the national debt over the next decade.
Musk has consistently denounced the bill as excessively large and inefficient. This disagreement contributed to a public fallout with Trump in early June, eventually leading to Musk’s resignation from his role at DOGE.