Musk: Subsidies Represent Less Than 2% of Tesla, SpaceX Value
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Tesla’s CEO, Elon Musk, asserted the company’s sales increased after the federal electric vehicle tax credit ended in September 2025. This followed a CNN article that discussed SpaceX’s receipt of over $500 million in early NASA grants and Tesla benefiting from a $465 million federal loan and billions in regulatory credit sales. Contrasting with Musk’s claim, however, data from Kelley Blue Book showed Tesla’s domestic sales slid sharply following the suspension of the tax credit, with a 34.6% decline since the credit ended.
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Tesla Sales Increased after Trump Ended EV Tax Credit, Claims CEO Elon Musk
Elon Musk, CEO of Tesla stated that Tesla’s sales increased following the elimination of the federal electric vehicle tax credit by President Donald Trump on September 30, 2025. His claims were made in response to an article by CNN’s Chris Isidore which examined the role of government support in Musk’s journey to becoming the world’s first trillionaire.
Role of Government Subsidies in Tesla’s Success
The CNN article detailed the support SpaceX received from NASA in the form of more than $500 million in early grants and Tesla’s gain from a $465 million federal loan and billions in regulatory credit sales. Democratic Senator Ed Markey shared the article and pointed out that such subsidies represent taxpayer’s money, sparking a response from Republican Senator Mike Lee in defense of Tesla’s CEO.
Musk responded to the article, calling it “totally false” and argued that government incentives received by his companies constitute less than 2% of SpaceX and Tesla’s combined value. Musk claimed that the incentives actually helped competitors more and that Tesla’s sales “actually INCREASED” after Trump removed the $7,500 credit. Musk further argued that SpaceX’s decision to go public, which resulted in him becoming the world’s first trillionaire, had nothing to do with government subsidies.
Impact of EV Tax Credit Elimination on Tesla Sales
The $7,500 federal EV tax credit was discontinued on September 30, 2025, when Trump signed the One Big Beautiful Bill Act into law. Musk himself had advocated for the elimination of all government subsidies in a November 2024 post.
Data from Cox Automotive’s Kelley Blue Book shows that Tesla’s domestic sales fell sharply after the tax credit was discontinued. In the third quarter of 2025, Tesla sold 179,525 vehicles in the United States. Once the tax credit expired, Tesla’s US sales dropped to 138,000 in the fourth quarter of 2025 — a 23.1% decline from the prior quarter.
EV Market Share Increase Despite Sales Decline
Despite the sales drop, Musk’s claims of increased sales might be tied to Tesla’s increased market share in the EV industry. The broader EV market experienced a greater contraction than Tesla’s sales post the credit end. This led to Tesla’s share of US EV sales climbing from 41.0% in the third quarter of 2025 to 58.9% in the fourth quarter of 2025 and 54.2% in the first quarter of 2026.
Performance Comparison with Other EV Makers
Despite the market share increase, Tesla’s year-over-year performance in the first quarter of 2026 was the weakest among all three US-based pure-play EV makers. Rivian sold 10,365 vehicles domestically between January and March, a 21.2% increase from a year earlier. Lucid Motors sold 2,551 vehicles in the US during the first quarter, up 3.5% from a year earlier. On the other hand, Tesla’s sales fell 34.6% over the same period.
Legacy Automakers Suffer Greater Losses
Legacy automakers such as Ford and General Motors suffered more significant sales drops. Ford’s US EV sales dropped 69.6% year-over-year from 30,612 in the third quarter of 2025 to just 6,860 in the first quarter of 2026.
Tesla’s Preemptive Measures and Future Outlook
Despite claiming an increase in sales, Tesla’s actions prior to the cancellation of the EV tax credit suggest an anticipation of a sales decline. In the third quarter of 2025, Tesla offered record US incentives to drive sales ahead of the EV tax credit’s expiration. Following the credit’s elimination, Tesla introduced attractive financing options on Model Y and Model 3, indicating a strategy to combat falling sales.
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