Core Viewpoint - Elon Musk's significant donation of over $250 million to support Donald Trump's election is now facing backlash as Trump's "Big Beautiful Bill" threatens to cost Tesla billions due to changes in carbon credit trading policies [1][2]. Group 1: Impact of Trump's Legislation - Trump's "Big Beautiful Bill" aims to eliminate key rules that allow electric vehicle manufacturers to sell billions in carbon credits, which are crucial for Tesla's profitability [1]. - The bill has passed Congress and is set to be signed by Trump, despite strong opposition from Democrats [1]. - The new legislation sets fines for corporate average fuel economy (CAFE) standards to zero, removing the incentive for traditional automakers to purchase Tesla's carbon credits [1][3]. Group 2: Financial Implications for Tesla - In Q1, Tesla's carbon credit sales generated $595 million, surpassing its net income of $409 million; without this revenue, Tesla would face losses [1][3]. - Tesla's projected revenue from carbon credits for 2024 is $2.8 billion, a significant increase from $1.8 billion in 2023, accounting for 39% of its annual net profit of $7.1 billion [3]. - The company has accumulated over $11 billion in revenue from carbon credit sales since 2015, with approximately 75% of this income coming from the U.S. market [3]. Group 3: Broader Business Challenges - Other Tesla operations, including battery manufacturing, its network of 2,600 U.S. Supercharger stations, solar roofs, and energy storage solutions, will also lose critical federal support or tax incentives due to the new legislation [4]. - The $7,500 federal tax credit for specific electric vehicle purchases and leases will be eliminated by the end of September, further impacting sales [4]. - Trump's unpredictable tariff policies may disrupt Tesla's supply chain and access to essential materials, compounding the challenges faced by the company [4]. Group 4: Musk's Response and Industry Reactions - Musk has publicly criticized the bill as "odious" and threatened political donations against supporters of the legislation, but his response appears limited [5]. - Trump has countered Musk's criticisms, suggesting that without subsidies, Musk might have to shut down operations and return to South Africa [5]. - A former Tesla executive noted that the policy changes represent a cumulative negative impact on Tesla's profitability, indicating that Musk's realization of the situation may have come too late [5].