From EV Subsidies To Big, Beautiful Bill: Here Are 5 Major Points Of Disagreement Between Elon Musk & US Prez Donald Trump

In a political and business clash that has now become public, tensions between Tesla CEO Elon Musk and US President Donald Trump have reached new heights.

Once allies on innovation and infrastructure, the two are now at odds over five critical policy areas, from electric vehicle subsidies and global trade to Musk's relations with China. Here’s a breakdown of the five key issues dividing the world's richest man and the world's most powerful man:

1. EV Subsidies: Trump Wants Petrol, Musk Bets on Electric

One of the main points of conflict is over government support for electric vehicles (EVs). Trump’s administration is pushing to eliminate what it calls “unfair subsidies” for EVs. A draft budget proposal expected to form part of Trump's "one big, beautiful bill" aims to axe the $7,500 consumer tax credit for EVs, as well as subsidies for used EV purchases and home charging equipment.

The order also directs agencies to review "government-imposed market distortions" that favour EVs over petrol or diesel vehicles. Trump has long signalled he prefers traditional energy like coal and oil over what he’s termed a "forced EV transition."

For Musk, the proposed elimination of EV subsidies could hit demand across the market, though ironically, it may benefit Tesla by levelling the playing field, as Tesla buyers had already phased out of the subsidy under existing rules.

2. Budget Bill Feud: Musk Slams, Trump Hits Back

The rift widened further after Musk publicly criticised Trump’s new budget bill, calling it a “disgusting abomination” and urging Americans to “kill the bill.” Trump, in turn, claimed to have removed Musk from EV policymaking roles and hinted at scrapping Tesla’s government contracts.

“Elon was ‘wearing thin,’ I asked him to leave,” Trump posted on Truth Social, adding that terminating Musk’s subsidies and contracts would be the “easiest way” to save billions in the budget.

3. China: Musk Wants Trade, Trump Wants Tariffs

Musk’s business ties with China, where Tesla’s Gigafactory in Shanghai plays a central role, stand in contrast to Trump’s tough-on-China stance. Musk has maintained cordial relations with Chinese officials, which many see as a strategic move to secure Tesla’s second-largest market.

Meanwhile, Trump continues to push for steep tariffs and strict trade terms with China, even as he recently hailed a temporary trade deal. Musk has previously raised concerns that trade barriers could hinder Tesla’s growth in the region, which is also home to fast-rising EV competitors like BYD.

4. Europe: Musk Calls for Free Trade, Trump Promotes Reciprocal Tariffs

Musk has advocated for a free trade zone between the US and Europe, calling for zero tariffs and open borders to boost innovation and commerce. “Ideally, both Europe and the United States should move to a zero-tariff situation,” Musk said during a recent virtual appearance at an event hosted by Italy’s League party.

Trump, however, is moving in the opposite direction, announcing plans to impose a 20% tariff on EU imports. His “America First” stance includes correcting trade imbalances with European nations like Italy, which have significant surpluses with the US.

5. MAGA Vision: Musk Supports Openness, Trump Wants 'America First'

The fundamental difference in worldview between the two, is another stark point of conflict. Musk champions global cooperation and open trade, believing in cross-border innovation and movement. Trump, on the other hand, is steadfast in his "MAGA" policy, prioritising domestic industry, tariffs, and national self-reliance.

While Musk envisions a world of interconnected economies and seamless trade, Trump is focused on restoring what he sees as lost American power through protectionist policies.