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President Donald Trump has pushed back on comments made by his press secretary, Karoline Leavitt, who suggested that he may not support ongoing federal contracts with Elon Musk’s companies.

Some shit you should know before you read: It’s no secret that President Trump’s relationship with Elon Musk has deteriorated in recent months, unraveling after a series of public criticisms and political disagreements. Once allies, the two began clashing after Musk harshly criticized Trump’s signature spending bill, the “One Big Beautiful Bill,” calling it a “disgusting abomination.” Their feud escalated as Musk floated the idea of supporting a third party, made claims about Trump’s ties to Jeffrey Epstein, and openly questioned the president’s leadership. In response, Trump took aim at Musk’sextensive reliance on federal subsidies and contracts, threatening in June to revoke them entirely, claiming it could save the government “billions and billions of dollars.” Against this backdrop of political tension, White House press secretary Karoline Leavitt was asked yesterday whether Trump supports federal agencies continuing to work with Musk’scompanies (specifically his AI startup xAI), which just landed a $200 million Pentagon contract. Leavitt replied that she didn’t “think” the president supports such contracts but would need to speak with him directly to confirm.

What’s going on now: In a notable development, President Trump took to Truth Social to push back on growing speculation that he plans to dismantle Elon Musk’s government support. Trump wrote, “Everyone is stating that I will destroy Elon’s companies by taking away some, if not all, of the large scale subsidies he receives from the US Government. This is not so! I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before! The better they do, the better the USA does, and that’s good for all of us. We are setting records every day, and I want to keep it that way!”

This comes as Tesla faces mounting financial pressure due to the expiration of key federal incentives tied to electric vehicle production. On the company’s second-quarter earnings call, Musk warned that Tesla could experience “a few rough quarters,” citing the negative impact of the recently enacted One Big Beautiful Bill, which phases out the $7,500 EV tax credit.

Musk’s companies remain heavily dependent on federal subsidies and contracts, leaving them vulnerable to shifts in political will. SpaceX has received more than $22 billion in federal funding since 2008, primarily through contracts with NASA, the US Air Force, and the Space Force. Tesla, meanwhile, has generated over $12 billion from the sale of regulatory credits (benefits derived from federal and state emissions mandates) since 2015, including $439 million in the second quarter of 2025 alone.