Musk Lambasts Trump's Senate Tax Bill Over Clean‑Energy Cuts
Senate Republicans have advanced a version of President Trump's sweeping tax and spending bill that would accelerate the end of several clean‑energy incentives, prompting fierce criticism from Elon Musk, who warned the proposal threatens millions of jobs and harms future industries.
The legislation aims to eliminate the federal $7,500 tax credit for new electric vehicles and a $4,000 credit for used models by September 30, 2025, and speeds up the repeal of wind and solar tax breaks—undermining incentives originally enacted in the Inflation Reduction Act. Musk described the Senate draft as 'utterly insane and destructive,' declaring on X that the bill grants 'handouts to industries of the past while severely damaging industries of the future'.
The Senate cleared a key procedural hurdle with a 51‑49 vote to formally begin debate, pausing Medicaid rollbacks and other spending cut provisions until a final vote. Republicans have urged swift passage before July 4, though the House must reconcile its version, which retains EV credits through 2025 and 2026 under certain thresholds, before the bill can become law.
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Energy advocates and industry leaders say the accelerated repeal threatens clean‑energy investments and competitiveness. The revised Senate text not only repeals incentives but also introduces new charges on wind and solar farms that incorporate Chinese materials after 2027. Analysts warn these provisions could jeopardise up to 830,000 clean‑energy jobs by 2030 and elevate electricity bills.
Musk, who briefly led Trump's Department of Government Efficiency, has returned to full public criticism since departing the role, branding the bill a 'disgusting abomination' and cautioning its passage would represent 'political suicide for the Republican Party'. He also highlighted a projected $5 trillion rise in the national debt tied to the legislation.
Republican voices have diverged sharply. Some libertarian‑leaning senators, including Rand Paul and Mike Lee, echoed Musk's warnings about deficit growth, while others accused him of hypocrisy, pointing to earlier statements expressing openness to EV credit elimination.
Trump has defended the measure, branding it historic—claiming it's 'the biggest tax cuts in history'—and dismissed Musk's criticisms, accusing him of being aware of the provisions from the start.
Industry response has varied. Renewable energy companies like NorSun, Qcells, and Talon PV argue the rollback undermines clean-energy momentum and threatens jobs, while proponents of fossil fuel see the bill as redressing a balance skewed by green subsidies. Analysts note that without clear incentives, U.S. firms risk ceding ground to China and the EU in EV adoption and green-tech development.
Economic modelling by the Congressional Budget Office anticipates a $2.4 trillion increase in deficits tied to the bill, with Trump's office arguing tariff revenues will offset some costs.
Senate Majority Leader John Thune is negotiating over state and local tax deductions, but energy provisions have remained largely intact from the committee version—the exclusions are non‑negotiable in the Senate's timeline.
Without bipartisan support, the bill's tight 53‑47 Senate margin leaves little room for defections—making the final outcome unpredictable. Meanwhile, environmental organisations and energy‑sector analysts have labelled the bill a retreat from climate leadership—criticising the sudden reversal away from the objectives of the Inflation Reduction Act.
With the U.S. facing intense global competition in clean technology, the legislation's fate will likely shape the nation's economic and strategic positioning in the coming decade.
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