Tesla risks losing billions as Trump-Musk feud deepens

Tesla might be on the brink of losing billions in government subsidies following a highly publicised fallout between CEO Elon Musk and US President Donald Trump.

The president’s recent rollback of support for green energy initiatives could significantly impact the electric vehicle (EV) giant’s future revenue.

As reported by the Sky News, federal and state subsidies have played a vital role in Tesla’s rise to becoming the world’s largest EV manufacturer.

In 2024 alone, Tesla earned $2.8 billion from selling regulatory credits, subsidies designed to encourage EV production, accounting for 38% of the company’s $7.1 billion in annual profits.

However, recent filings show Tesla brought in $595 million from regulatory credits in the first quarter of this year, far exceeding its net income of $409 million.

Without these credits, the company would have reported a loss for the quarter.

Tesla also benefited from a federal tax credit of $7,500 per EV purchase. With more than 630,000 Tesla vehicles sold in the US last year, these credits could have totaled $4.7 billion in consumer incentives.

However, the credit has now been eliminated as part of Trump’s new tax and spending legislation. 

Moreover, California’s authority to offer zero-emission vehicle credits has been revoked, potentially undermining similar programs across the country.