Elon Musk has never been one to shy away from public confrontation, but his latest remarks mark a significant shift—perhaps even the end—of his once-close alignment with President Donald Trump. In a sharp and unexpected critique delivered during a “CBS Sunday Morning” interview, Musk blasted the president’s latest tax and spending legislation, labeling it as a threat to the very government reform initiatives he’s led under the Department of Government Efficiency (DOGE).
“I was disappointed to see the massive spending bill, frankly, which increases the budget deficit—not just decreases it—and undermines the work that the DOGE team is doing,” Musk said.
This public rebuke has triggered speculation across political and financial circles: Is the Trump-Musk alliance unraveling? And what does this mean for Tesla’s blistering stock rally, which has defied declining earnings and valuation pressures?
The “Big, Beautiful Bill”: What’s in It?
President Trump’s latest legislative push—dubbed the “One Big Beautiful Bill Act”—was promoted as a sweeping package to stimulate the U.S. economy. Backed heavily by House Republicans, the bill aims to:
- Extend the 2017 Trump-era tax cuts
- Increase spending on border security
- Impose work requirements on Medicaid recipients
- Roll back federal clean energy tax credits
- Inject new funding into military and infrastructure programs
But it’s the fiscal implications that have Musk—and now a growing number of critics—raising alarms. According to the Congressional Budget Office, the bill would add $3.8 trillion to the federal deficit by 2034.
Musk took direct aim at the bill’s branding: “I think a bill can be big or it can be beautiful,” he told CBS News, “but I don’t know if it can be both.”
DOGE’s Mandate Undermined
At the center of this political and financial dust-up is DOGE—the Department of Government Efficiency—a controversial Trump-era agency that Musk was tapped to lead in early 2025. The agency’s mission? Slash waste, cut bureaucratic red tape, and deliver measurable savings across the federal government.
Musk’s tenure at DOGE began with sweeping audits and high-profile cost-cutting efforts. The agency claims to have saved taxpayers over $175 billion to date through aggressive streamlining measures. While Musk has recently begun stepping back from day-to-day operations at DOGE to refocus on Tesla, SpaceX, and X (formerly Twitter), he’s remained vocal about the agency’s work.
Tesla Stock on Fire Despite Storm Clouds
Ironically, while Musk criticizes federal spending, Tesla stock continues to defy gravity. As of market close on May 27, Tesla (NASDAQ: TSLA) was trading around $363 per share—a gain of more than 50% since the company’s first-quarter earnings report on April 22.
That rally has occurred even as earnings estimates have been slashed. According to FactSet, the 2025 consensus EPS for Tesla has fallen from $2.74 to $1.93 per share—a clear signal that investor enthusiasm is being fueled by more than just earnings.
Technical analysts say the momentum is far from over.
“Tesla still has positive short-term momentum and doesn’t have any ‘sell’ signals yet,” said Will Tamplin of Fairlead Strategies. “It has room to run to the next resistance level near $384.”
That optimism is being driven in part by Musk’s aggressive push into AI and autonomous driving.
Robo-Taxi Rollout: Tesla’s Next Big Bet
In late June, Tesla plans to launch its much-hyped self-driving taxi service in Austin, Texas. The pilot program—limited at first to a few dozen modified Model Y vehicles—will rely on Tesla’s Full Self-Driving (FSD) software to operate within geofenced areas, monitored remotely by company staff.
If successful, Tesla aims to scale the robotaxi fleet to 1,000 cars by year’s end.
Musk has called the project a “game-changer” and hinted that Tesla’s AI capabilities could eventually rival OpenAI and Google’s DeepMind in impact. Investors seem to agree: AI exposure has become one of the top reasons analysts and retail traders cite when justifying Tesla’s premium valuation.
“The excitement around the robotaxi is legitimate,” said Wedbush Securities analyst Dan Ives. “This isn’t just a product launch—it’s a platform shift. It could unlock a trillion-dollar market for Tesla.”
A Political Rift with Real Consequences?
Musk’s falling out with Trump could have deeper consequences than just bruised egos. The Tesla CEO has long enjoyed preferential treatment under the Trump administration—from regulatory leniency to a direct line into federal procurement channels via DOGE.
Some analysts worry that his criticism of the spending bill could complicate Tesla’s future dealings with the federal government.
“This could hurt Musk’s access to power,” said political risk analyst Emily Chen of Strategos Global. “He was the administration’s tech envoy. Now, he’s a vocal critic of its flagship legislation.”
Others, however, see this as part of a longer strategy. “Musk is repositioning,” said independent tech commentator Kevin Roose. “He wants to be a free-market advocate, not just a billionaire who’s close to power. This split lets him reclaim his outsider brand.”
Is This the End of the Musk-Trump Alliance?
The Trump-Musk dynamic has always been transactional. Early on, Musk’s leadership at DOGE gave Trump a business-friendly reformer he could promote. Musk, in return, got access, influence, and a powerful platform.
Now, as policy priorities diverge—with Trump leaning into defense and spending, and Musk doubling down on efficiency and innovation—the alliance may be fraying.
“Musk criticizing Trump publicly is no small thing,” said Axios editor-in-chief Nicholas Johnston. “This is the first real break. It’s not just policy—it’s personal.”
And the implications could ripple far beyond Washington. If the Senate modifies or rejects the “One Big Beautiful Bill,” it could embolden fiscal hawks—including Musk—who argue for tighter government budgets and innovation-driven growth.
Investor Takeaway: What to Watch
For investors, the key question is whether the tension between Musk and the administration affects Tesla’s performance—or creates new opportunities.
Keep an eye on the following:
- Senate deliberations on the spending bill: Amendments could dial back the fiscal impact or reintroduce clean energy credits, which would benefit Tesla.
- DOGE’s operational shift: If Musk steps down fully, will the agency maintain its current savings trajectory?
- Robotaxi pilot results: June’s rollout in Austin could make or break the next phase of Tesla’s growth narrative.
- Market response to political shifts: Watch for any retaliatory measures or regulatory scrutiny tied to Musk’s criticism.
Final Thoughts
Elon Musk’s rebuke of Trump’s “One Big Beautiful Bill” signals more than just a policy disagreement—it reflects a broader shift in how Musk sees his role in both business and government. While Tesla stock continues to surge, driven by AI enthusiasm and autonomous vehicle hopes, political tensions could complicate the road ahead.
For now, investors are betting that Musk’s vision will outpace Washington’s dysfunction. But in the high-stakes world of electric vehicles, AI, and federal spending, nothing is guaranteed.
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