President Donald Trump criticized Elon Musk, CEO of Tesla, on Sunday, July 6, 2025, labeling the formation of a new political entity by Musk as “ridiculous” and stating that Musk had gone “completely off the rails.” This conflict between Trump and Musk intensified following Musk’s announcement on Saturday of the America Party, which he positioned as an alternative to the existing Republican-Democratic system.
In a detailed Truth Social post, Trump expressed dissatisfaction with Musk, a former supporter, suggesting that Musk was “essentially becoming a TRAIN WRECK over the past five weeks.” Trump attributed Musk’s actions to financial motives, particularly opposition to Trump’s removal of electric vehicle incentives in a recent spending bill.
Addressing reporters before boarding Air Force One on Sunday, Trump reiterated his stance against third-party politics, suggesting that a third-party initiative would only complicate the traditional two-party system in the United States. He pointed out that historically, third parties have struggled to succeed, often causing disruption.
Musk’s unveiling of the America Party followed extensive public disagreement over Trump’s “Big Beautiful Bill,” which was enacted on July 4. Musk conducted a poll on his social media platform X, querying followers on their preference for independence from the current two-party system. The poll attracted over 1.2 million responses, with a two-to-one majority favoring change.
The billionaire entrepreneur shared his political strategy on Friday, highlighting a plan for the new party to target two or three Senate seats and eight to ten House districts. This strategy could position the America Party as a pivotal force in legislative decisions, considering the narrow margins in Congress. Musk clarified that while the party might support a presidential candidate eventually, its primary focus for the next year would be on congressional races.
The relationship between Trump and Musk has deteriorated since the start of Trump’s second term. Musk, a significant donor to Trump’s 2024 campaign, was appointed to lead the Department of Government Efficiency (DOGE), tasked with identifying federal spending cuts. However, their alliance weakened over disagreements concerning Trump’s spending legislation.
Trump’s “Big Beautiful Bill” removed tax credits for electric vehicle purchases, affecting Musk’s Tesla operations. Trump mentioned in his Truth Social post that he had previously informed Musk about ending the EV tax credit. Trump stated that when Musk endorsed him, he specifically asked if Musk understood his intentions to discontinue the electric vehicle mandate, to which Musk reportedly expressed no objections.
The spending bill, estimated by experts to increase the federal deficit by $3.4 trillion over ten years, allocates more funds to border security, defense, and energy production, balanced by cuts to healthcare and food-support programs. Musk has repeatedly criticized the bill, arguing it would financially strain the United States and undermine its strategic interests.
Treasury Secretary Scott Bessent commented on the situation during a CNN interview on Sunday, suggesting that the boards of Musk’s companies might prefer he concentrate on business over politics. Bessent noted that while DOGE’s principles were popular, Musk was less well-received in polling. Musk responded, disputing this portrayal of his popularity ratings.
The conflict has also drawn criticism from Trump allies, including James Fishback, CEO of investment firm Invest Azoria. Fishback announced a delay in the initial public offering of his Azoria Tesla Convexity ETF in direct response to Musk’s new party formation. He argued that Musk’s political actions conflict with his duties as Tesla CEO and distract from the company’s stakeholders.
The creation of the America Party presents a challenge to the long-standing two-party system in the U.S. However, overcoming the Republican-Democratic dominance will be challenging due to the structural advantages of established parties.
Musk’s announcement coincides with Trump’s ongoing tariff negotiations with international trade partners. Trump has extended the pause on tariff implementation to August 1 while discussions with various nations continue.
