Tax Threat for EVs
The relationship between American President Trump and Tesla CEO Elon Musk has taken a striking turn, and it hasn’t become more pleasant. Musk is strongly opposed to new budget plans, but according to Trump, that’s only because EVs fare poorly in that ‘Big, beautiful bill’.
The line between what is car news and what is not is blurring a bit due to Elon Musk’s activities. After all, Musk is primarily known as the CEO of Tesla and, as such, has relevance to the automotive world, but certainly not everything he does has to do with it. At AutoWeek, we try to make well-considered choices, but today they result in another message. The current, explosive relationship between Trump and Musk does indeed have a car hook.
Wait a minute, explosive? Indeed! Musk and Trump have been publicly fighting each other in recent days, both – hilariously enough – from their own social media platform. It should be clear that Musk’s work at the Department of Government Efficiency (DOGE) has thus come to a resolute end. DOGE implemented all kinds of rigorous cost savings at the American government, but according to Musk, a new budget plan from Trump contradicts this. The ‘Big Beautiful Bill’, as Trump calls it, includes all kinds of reforms and would cause the national debt to rise again.
Trump fights back – and here comes the car hook – by stating that Musk is only against these plans because, as part of those reforms, the tax benefit for EVs is being scrapped prematurely. This would mean, among other things, that EV owners will pay an annual ‘fee’ of a few hundred dollars, reportedly to compensate for taxes missed at the pump. Musk denies that this is the reason for his resistance to the ‘bill’ and is instead indignant that he has not seen the plans at all.
In one of the fierce reactions, Trump threatens to terminate all government contracts between the American government and Musk’s companies, and that threat is being taken seriously by shareholders in any case. The Tesla share collapsed by 14.3 percent on Thursday evening, although it could be very different again in a few days.
It should be clear: much has changed since Trump bought a Tesla to support Musk.