Trump: Easiest way to save money is to terminate Musk contract

Trump: Easiest way to save money is to terminate Musk contract

Title: Trump: Easiest Way to Save Money is to Terminate Musk Contract

President Donald Trump has suggested that the easiest way to save money is to terminate Elon Musk's contract with the White House. Musk, who was appointed to a temporary role in the Department of Government Efficiency (DOGE) to lead a cost-cutting project, has been vocal in his criticism of the president's new budget bill.

Musk's public attacks on the bill, which he referred to as a "disgusting abomination," have strained his relationship with the Trump administration. The president himself has expressed disappointment with Musk's criticism, stating that Musk's rhetoric is now "upsetting" [1].

Tesla shares have been volatile in recent weeks, dropping more than 5% on Thursday amidst Musk's increased criticism. The stock has been on a roller-coaster ride since Musk's endorsement of Trump in mid-July 2024, gaining 169% from that point through mid-December, followed by a 54% selloff through early April [3].

The House of Representatives' version of the budget bill proposes largely ending the popular US$7,500 electric vehicle subsidy by the end of 2025. Tesla and other automakers have relied on incentives for years to drum up demand, but Mr. Trump promised during the transition to end the subsidy. This could pose a significant risk to Tesla's profitability, with J.P. Morgan analysts estimating a US$1.2-billion hit to its full-year profit and an additional US$2-billion setback to regulatory credit sales due to separate Senate legislation targeting California's EV sales mandates [1].

Musk's leadership of DOGE and his alignment with the Trump administration have put off some Tesla buyers. Sales of his EVs have slumped in Europe, China, and key U.S. markets like California, even as overall electric vehicle purchases continue to grow [1].

Despite the political tensions, Tesla remains the most valuable automaker worldwide, with a market value of US$1-trillion, far surpassing Toyota Motor's market value of about US$290-billion. The company trades at 140.21 times profit estimates, a steep premium to other Big Tech stocks like Nvidia [1].

References:
[1] https://www.theglobeandmail.com/investing/article-tesla-shares-down-as-trump-fires-back-at-ally-musk/
[2] https://economictimes.indiatimes.com/news/international/us/elon-musk-wanted-a-bigger-role-to-tackle-1-trillion-in-spending-but-trump-officials-reportedly-booted-him-out/articleshow/121650822.cms?from=mdr
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_L3N3S8112:0-tesla-shares-slide-as-musk-steps-up-criticism-of-ally-trump/