Donald Trump Calls Elon Musk 'Crazy', Threatens To Cut Government Contracts, Subsidies

US President Donald Trump called billionaire Elon Musk "crazy" on Thursday and threatened to cut government contracts and subsidies as both traded barbs over a contentious budget plan.

"Elon was 'wearing thin', I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!" Trump posted on Truth Social.

"The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!" the president added.

Reacting to it on X, Musk said: "Such an obvious lie. So sad."

"In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately," Musk retorted.

The Dragon spacecraft is capable of carrying up to seven passengers to and from Earth's orbit, and beyond. It is the only spacecraft currently flying that is capable of returning significant amounts of cargo to Earth and is the first private spacecraft to take humans to the space station, according to the SpaceX website.

The exchanges were triggered after Trump's comments on Musk's criticism over a contentious budget plan that has been passed by the US House of Representatives and now heads to the Senate. The Tesla stock became a casualty in the fire as it plunged during New York trading hours.

The duo's political alliance began last year when Musk endorsed Trump for the 2024 presidential election and campaigned aggressively for the Republican candidate. Trump later appointed Musk to lead the Department of Government Efficiency or DOGE to implement reforms.

Last Friday, Trump held a presser to mark the exit of Musk from DOGE. The president had thanked Musk, who has announced his exit from the administration, adding that the chief executive officer of Tesla Inc. and SpaceX delivered a "colossal change" in the old ways of doing business in Washington.