President Donald Trump is parting ways with his Tesla Modelo S after a public falling out with Tesla CEO Elon Musk, a move that underscores tensions between the two influential figures and raises questions about the electric vehicle (EV) industry’s future. According to a report by The Daily Beast, Trump’s decision follows a series of heated exchanges, including Musk’s criticism of Trump’s budget bill and Trump’s threats to cancel Musk’s federal contracts.

A High-Profile Breakup with EVs

Trump purchased the red Tesla Model S in March for $80,000, initially showcasing it during a demonstration on the South Lawn of the White House.

At the time, Trump expressed enthusiasm, stating, “Wow, that’s beautiful,” as he climbed into the vehicle, adding, “This is a different panel than I ever—everything’s computer!”

The event was meant to signal support for Tesla amid the company’s struggles, including a reported 40% drop in European sales. However, the relationship soured after Musk publicly opposed Trump’s “big beautiful” budget bill, which the Congressional Budget Office estimates will add $2.4 trillion to the deficit over a decade.

The feud escalated this week when Musk criticized Trump’s “big, beautiful bill” on X, calling it a “disgusting abomination,” prompting Trump to retaliate by calling Musk “CRAZY” and accusing him of being “upset that the bill is cutting the electric vehicle tax credits, which have benefited Tesla for years,” Fox News reporter Peter Doocy reported to the Daily Beast.

Trump Dumps Tesla After Musk Feud: Drama Unfolds

Implications for Tesla and the EV Industry

Tesla has faced significant challenges recently, including vandalism of its vehicles by protesters angry over Department of Energy (DOE) budget cuts. The company also contends with declining global sales, with the 40% drop in Europa reflecting broader market struggles.

Musk’s role as head of the so-called “department” of government efficiency, alongside his $300 million contribution to Trump’s re-election, has further complicated Tesla’s public image. White House officials have accused Musk of prioritizing personal grievances over policy, while Musk has threatened to “fire all politicians” who supported the budget bill.

For EV owners, this high-profile split could signal broader uncertainty. The potential loss of federal EV tax credits, which have historically lowered the cost of vehicles like the Model S—priced at $80,000—may deter prospective buyers.

Additionally, Trump’s threats to cancel Musk’s federal contracts, including those tied to Tesla’s battery production and SpaceX’s government partnerships, could disrupt Tesla’s supply chain and innovation pipeline. This is particularly concerning given Tesla’s reliance on federal support for scaling its Red de supercargadores, which currently spans over 2,500 stations across the U.S., covering over 30,000 individual chargers.