The electric vehicle (EV) industry faces a seismic shift as billionaire innovator Elon Musk, CEO of Tesla and SpaceX, unleashes a scathing critique of US President Donald Trump’s latest tax bill. Passed by the US Senate in a contentious vote on June 28, 2025, the legislation threatens to dismantle vital EV tax credits, a move Musk warns could devastate the clean energy sector and jeopardize millions of jobs. For the UK, where EV adoption is accelerating, this policy could ripple across the Atlantic, impacting investment, innovation, and the nation’s net-zero ambitions.
Why Musk Is Fuming Over Trump’s Tax Bill
Musk, a prominent figure in the global push for sustainable transport, took to his social media platform X to denounce the US Senate’s decision to advance Trump’s multi-trillion-dollar tax package. The bill, dubbed the “One Big, Beautiful Bill Act,” eliminates critical financial incentives, including the $7,500 consumer tax credit for new electric vehicles and additional credits for used and commercial EVs, effective September 30, 2025. Musk described the cuts as “incredibly destructive,” arguing they prioritize outdated industries while stifling the growth of future-focused sectors like electric mobility.
“This bill hands out subsidies to legacy industries like oil and gas while gutting support for EVs and solar,” Musk posted on X. “It’s a betrayal of America’s energy independence and a threat to millions of jobs in the clean energy sector.” His comments reflect a broader concern that the legislation undermines the global transition to sustainable energy, a cause Musk has championed for decades.
The UK, a leader in EV adoption with over 1.2 million electric vehicles registered by mid-2025, could feel indirect effects. British automakers and Tesla’s operations in the region rely on a robust global EV market. A slowdown in US demand due to the loss of tax credits could disrupt supply chains, reduce economies of scale, and increase costs for UK consumers.
The Trump Tax Bill: What’s at Stake for EVs?
The Trump tax bill, which narrowly passed the US House in May 2025, is a cornerstone of the president’s second-term agenda. It extends tax cuts from his 2017 Tax Cuts and Jobs Act, boosts funding for defense and immigration enforcement, and raises the US debt ceiling by $4 trillion. To offset these costs, the bill slashes funding for social programs like Medicaid and food assistance while eliminating clean energy incentives, including EV tax credits.
For Tesla, the removal of the $7,500 tax credit is a significant blow. The incentive has been instrumental in driving consumer demand for electric vehicles, making models like the Tesla Model 3 and Model Y more affordable. Analysts estimate that the loss of this credit could cost Tesla up to $1.2 billion in 2025 alone, with ripple effects on pricing and sales in markets like the UK, where Tesla delivered over 50,000 vehicles in 2024.
| Impact Area | Details | Potential UK Implications |
|---|---|---|
| EV Tax Credits | $7,500 credit for new EVs, $4,000 for used EVs eliminated by Sept 30, 2025 | Higher EV prices, reduced consumer demand in global markets |
| Tesla’s Financials | Potential $1.2B loss in 2025 due to credit cuts | Increased costs for UK Tesla buyers, supply chain disruptions |
| Clean Energy Jobs | Millions of US jobs at risk, per Musk | Slower global EV growth could impact UK manufacturing and jobs |
| Energy Independence | Reduced EV and solar incentives threaten grid reliability | UK’s net-zero goals may face delays due to global market shifts |
| Competitor Impact | Legacy automakers may face greater losses than Tesla | Potential advantage for Tesla in UK, but overall market slowdown |
Musk’s Falling-Out with Trump: A High-Stakes Rift
The public feud between Musk and Trump marks a dramatic shift in their relationship. Until recently, Musk was a key ally, serving as the head of Trump’s Department of Government Efficiency (DOGE), tasked with slashing $2 trillion from the federal budget. Musk’s abrupt departure from the role in May 2025, after achieving only a fraction of his cost-cutting goals, signaled tensions. The tax bill has now ignited a full-blown clash.
Trump, speaking at the White House, expressed disappointment in Musk, claiming the billionaire’s opposition stems from the EV credit cuts. “Elon knew every detail of this bill,” Trump said on June 5, 2025. “He only got upset when we cut the EV mandate, which costs billions.” Musk swiftly refuted this, insisting his primary concern is the bill’s “mountain of disgusting pork” and its projected $2.4 trillion to $5 trillion increase in the US national debt over a decade.
Musk’s influence as a former Trump advisor and the world’s richest person amplifies his criticism. His posts on X, including a poll asking if it’s time for a new US political party, have sparked debate among UK tech enthusiasts and policymakers. The UK’s EV sector, which includes manufacturing hubs in Sunderland and Coventry, could face challenges if global demand falters due to US policy shifts.
The Bigger Picture: EVs and the UK’s Net-Zero Ambitions
The UK has set an ambitious target to phase out new petrol and diesel car sales by 2035, with EVs playing a central role. Government incentives, such as the Plug-in Car Grant (now discontinued) and low-emission vehicle policies, have driven EV adoption. However, the US tax bill could disrupt this momentum by weakening global EV markets.
Musk’s warnings resonate in the UK, where clean energy jobs employ over 400,000 people. A slowdown in US EV demand could reduce investment in battery technology and charging infrastructure, both critical for the UK’s net-zero goals. Tesla’s UK operations, including its London-based service centers and planned Gigafactory expansion, could face higher costs if global economies of scale diminish.
Analysts like Dan Ives of Wedbush Securities argue that Tesla is better positioned than legacy automakers like Ford or General Motors to weather the loss of tax credits. “Tesla’s profitability gives it an edge, but the credit cuts will still hurt,” Ives told CommaFast. In the UK, where Tesla competes with brands like Nissan and Jaguar Land Rover, this could create a temporary advantage but risks a broader market contraction.
Musk’s Push for a Sensible Wind-Down
Musk and Tesla Energy have called for a “sensible wind-down” of EV and solar tax credits rather than an abrupt end. “Sudden cuts threaten America’s energy independence and grid reliability,” Tesla Energy posted on X. This stance aligns with the UK’s gradual approach to phasing out fossil fuel subsidies while scaling up renewable energy investments.
The UK’s EV market, valued at £12 billion in 2024, depends on stable global supply chains. A abrupt halt to US incentives could disrupt battery production and increase costs for UK consumers, who already face high upfront costs for EVs. Musk’s advocacy for a phased reduction reflects a pragmatic approach, balancing fiscal responsibility with the need to sustain clean energy growth.
What’s Next for Tesla and the UK EV Market?
As the US Senate debates the tax bill, its fate remains uncertain. Fiscal conservatives like Senators Rand Paul and Mike Lee echo Musk’s concerns about the deficit, while Trump remains steadfast. For the UK, the outcome could shape the trajectory of EV adoption and clean energy investment.
Tesla, despite its financial strength, faces challenges. The company reported a 67% revenue increase in its energy storage division in Q1 2025, but vehicle sales have dipped globally. The loss of US tax credits could exacerbate this, potentially raising prices for UK buyers. Meanwhile, competitors like Rivian and Lucid, which qualify for limited credits under the bill, may gain a temporary edge.
For UK policymakers, the lesson is clear: stable incentives are crucial for sustaining EV growth. The government’s £2.2 billion investment in charging infrastructure by 2030 could mitigate global disruptions, but coordination with international partners is essential. Musk’s outspoken criticism underscores the need for policies that prioritize innovation over short-term fiscal gains.
Conclusion: A Critical Juncture for Electric Mobility
Elon Musk’s clash with Trump over the 2025 tax bill highlights a pivotal moment for the EV industry. The elimination of tax credits threatens to slow the global transition to clean energy, with far-reaching implications for the UK’s net-zero ambitions. As Tesla navigates this storm, its resilience and Musk’s influence will shape the future of electric mobility. For UK consumers and businesses, staying informed and advocating for sustainable policies will be key to maintaining momentum.
