Elon Musk's rift with the Trump administration may have been brewing for months and it allegedly escalated into a physical confrontation, according to Trump ally and right-wing commentator Steve Bannon.
Bannon claims Treasury Secretary Scott Bessent called the Tesla CEO a “fraud,” which led to an altercation.
“Scott said, ‘You’re a fraud. You’re a total fraud,’” Bannon said in a recent interview. “President Trump heard about it and said, ‘This is too much,’” he added.
It’s unclear whether Bessent was making a formal accusation or using the term as an insult, but “fraud” is a label Musk has faced before.
Back in 2018, Tesla shareholders filed multiple class-action lawsuits, accusing Musk of securities fraud over his tweets about taking Tesla private, which allegedly wiped out $12 billion.
More recently, a New York judge ruled in March that another shareholder lawsuit could move forward, this time involving Musk’s delayed disclosure of Twitter stock purchases.
And just last month, former Social Security Administration chief Martin O’Malley called Musk “the biggest fraud” after Musk falsely accused the agency of widespread fraud, citing a report that found almost none.
Musk’s political fallout threatens Tesla’s bottom line
With the Musk-Trump bromance likely over, Tesla investors are hoping the CEO can steer the company back on track after a rocky quarter.
As Investors Observer reported, Tesla’s automotive revenue dropped 20% last quarter and profits fell a worrying 71%, a slump many analysts chalked up to Musk’s public ties to the Trump White House.
Musk has since promised to bring his focus back to Tesla. But that won’t be easy.
According to CNBC, Musk may have created a political enemy with real power, one that could influence everything from EV subsidies to tariff exemptions.
Some government officials are also starting to question whether Tesla’s board is doing enough to manage its high-profile CEO.
“The company’s board is not doing its job to ensure there is a CEO at Tesla who is putting the company’s interests first,” said Maryland Comptroller Brooke Lierman.
Meanwhile, Tesla’s brand has taken a reputational hit.
In February, iSeeCars.com reported that Tesla lost more resale value than any other automaker over the past year. That signals Musk’s political battles could be spilling over into the company’s bottom line.
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