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The "Big Beautiful" tax bill pushed by US President Trump aims to continue the tax cuts from the Tax Cuts and Jobs Act of his first term, while adding tax benefits for tips, overtime pay, and car loans. However, to offset the fiscal deficit caused by these tax cuts, the bill plans to eliminate several existing tax credits, including the federal tax credit for electric vehicles (EV), and could potentially increase spending by trillions of dollars.
This move sparked strong opposition from Tesla founder Elon Musk. Musk publicly criticized the bill as a "disgusting abomination" on X, accusing it of significantly increasing the US federal deficit and claiming it would push the US into "debt slavery" with an unsustainable burden on citizens, and even suggested the bill would cause the US to enter a recession in the second half of the year.
Trump Expresses Disappointment with Musk's Criticism
Musk also retorted: "If it weren't for me, Trump would have lost the election long ago, and the Democrats would have controlled the House of Representatives..."
Regarding Musk's criticism of his tax bill, Trump directly expressed that he was "very disappointed" with Musk:
I could have won Pennsylvania even without Musk.
I have helped him a lot. Musk's dissatisfaction is purely because the electric vehicle tax credit is being canceled. He hasn't spoken badly about me yet, but that will happen soon. Musk knows more about this bill than almost anyone.
Musk Refutes: The Bill Was Never Shown to Me
In response, Musk quickly replied on the X platform, denying Trump's claims and stating that he was completely unaware of the bill's details. He wrote:
Wrong, this bill was never shown to me even once, and it was quickly passed late at night, with almost no congressmen able to read it!
Additionally, Musk further commented in interaction with netizens:
Retaining provisions to reduce electric vehicle and photovoltaic incentives in the draft while leaving oil and gas subsidies untouched is unfair! Throughout the history of civilization, there is no such thing as "big and beautiful" legislation. Either create a "big and ugly" bill or a "slim and beautiful" bill, and the latter is the way forward.
In community discussions, Musk even reposted an article supporting his replacement of Trump, directly expressing support for Trump's impeachment on X.
Tesla Stock Plummets 14%
During their social media battle, Trump even threatened to cancel Musk's federal contracts:
The simplest way to save billions of dollars is to terminate Musk's government subsidies and contracts. I've always been surprised Biden hasn't done this!
It is understood that SpaceX and Tesla earn billions of dollars annually from federal government contracts and other projects. Tesla's stock price plummeted on the news, closing down over 14%.
Musk also countered: "Given the president's statement about canceling Tesla government contracts, SpaceX will immediately begin retiring its Dragon spacecraft." Currently, SpaceX's Dragon spacecraft is used by NASA to transport astronauts to the International Space Station.
What is the "Big Beautiful" Tax Bill?
The "One Big, Beautiful Bill" is an important bill from the Trump administration for 2025, aimed at continuing the tax cuts from 2017, while adding tax breaks for tips, overtime pay, and car loan interest, and increasing spending on defense and border security.
To make up for the fiscal gap, the bill plans to cancel clean energy incentives from the Inflation Reduction Act, including the maximum $7,500 tax credit for electric vehicles. This credit was originally set to expire in 2032 but will now be terminated on December 31, 2025, specifically targeting manufacturers that have sold over 200,000 electric vehicles, such as Tesla, General Motors, and Toyota. Additionally, the bill will impose a $250 annual fee on electric vehicles and terminate tax benefits for residential solar and battery storage, posing a threat to Tesla's energy business (such as Megapack and Powerwall).
According to Morgan Stanley analysts, canceling the $7,500 electric vehicle tax credit could cause Tesla to lose approximately $1.2 billion in profits in 2025 and 2026, as the actual purchase cost for consumers increases, potentially affecting Tesla vehicle demand. Furthermore, the bill will terminate the Zero Emission Vehicle (ZEV) credit sales from the California Air Resources Board (CARB), potentially causing an additional $2 billion in losses for Tesla.
