Elon Musk Criticizes Trumps Big Beautiful Bill: Mixed Impact on Tesla and xAI

Elon Musk Criticizes Trump’s ‘Big Beautiful Bill’ Amid Mixed Impact on Tesla and xAI

Elon Musk has strongly criticized President Donald Trump’s “Big Beautiful Bill,” calling it a “disgusting abomination” on X. The bill, which includes cuts to Medicaid and extensions of tax cuts, could have significant implications for Musk’s companies, particularly Tesla and xAI.

Tesla Faces Potential Losses

The bill threatens Tesla’s profits by phasing out the clean vehicle credit, which allows buyers of new electric vehicles (EVs) to claim up to $7,500 and up to $4,000 for used EVs. Under the proposed changes, EVs would no longer qualify for the tax credit if the automaker sold more than 200,000 previously qualifying EVs between December 31, 2009, and December 31, 2025. Tesla delivered over 336,000 vehicles in the first quarter of 2025 alone, making it vulnerable to these changes.

JPMorgan analyst Ryan Brinkman noted that the $7,500 consumer tax credit made up 19% of Tesla’s 2024 earnings before interest and tax, potentially resulting in a $1.2 billion headwind. Additionally, the removal of the California Air Resources Board (CARB) ZEV credit sales could create a $2 billion headwind for Tesla.

xAI Could Benefit from AI Regulation Changes

Conversely, Musk’s AI company, xAI, may benefit from the bill. One section prohibits states and local governments from regulating AI for the next decade, aiming to remove legal barriers related to deploying and adopting AI. This could allow xAI to develop and advance with less regulatory red tape. The bill also allocates funds toward modernizing the federal IT system with AI and improving cybersecurity, potentially positioning xAI to contract for these modernization efforts.

Mixed Impact on Musk’s Businesses

Musk’s companies rely heavily on federal regulations, subsidies, or contracts, meaning the GOP’s federal spending bill could directly impact his businesses. While Tesla may face significant challenges, xAI could see benefits from the proposed changes. The bill’s mixed impact highlights the complex relationship between federal policy and private enterprise in the tech and automotive industries.