Donald Trump's second administration plans to act on the president-elect's campaign promise to end President Joe Biden's EV tax credit that has benefited Tesla.

Two sources with direct knowledge of the matter said members of Trump's transition team intend to kill the $7,500 consumer tax credit for electric vehicle purchases as part of broader tax reform legislation, Reuters reported Thursday. It's a policy that has benefited Elon Musk, Tesla's CEO and Trump's newly appointed head of the proposed Department of Government Efficiency.

Musk, a vocal Trump supporter and the world's richest person, according to Forbes, has said that while killing the subsidy could hurt Tesla, which is best known for selling electric vehicles, it would devastate its competitors in the United States. When pressed on why he backed a candidate who wanted to end a subsidy benefiting his company, Musk did not appear concerned.

"Take away the subsidies. It will only help Tesla," Musk wrote in a post on X as he campaigned and raised money for Trump in July. "Also, remove subsidies from all industries!"

The week after Trump's victory in the 2024 presidential election, he announced Musk and fellow billionaire Vivek Ramaswamy would lead a department with an evocative acronym to cut potentially trillions in government spending.

Musk defended his companies in a public exchange on X in September when businessman Vinod Khosla questioned how much support they receive from the government.

"SpaceX gets no subsidies and received half as much as Boeing for astronaut transport, but did 100% of the work," Musk said. "As for Tesla, take a minute to read our public filings and you will see that EV incentives represent a minor part of our revenue."

Although Musk is now tasked with slashing federal spending, several of his companies are likely to continue to benefit from it, even if the EV tax credit is killed. Over the past 16 years, Musk's business deals with the government total nearly $20 billion, according to federal contracting data.

More:Trump taps Elon Musk, Vivek Ramaswamy to lead new 'Department of Government Efficiency'

Tesla

Musk's automotive and energy company, known for its pioneering electric vehicles and its battery storage innovations, has received $41.9 million in federal contracts since 2008.

Some of the largest purchasers include the National Oceanic and Atmospheric Administration, which spent $13.6 million; NASA, which spent $10.8 million; and the Department of Defense, which spent $9 million.

In 2015, the Los Angeles Times reported that Musk's growing Tesla empire separately benefited from about $4.9 billion in government subsidies. That figure, according to the newspaper, was estimated using a compilation of grants, tax breaks, factory construction, discounted loans and environmental credits the company can't sell, as well as Tesla buyer tax credits and rebates.

SpaceX

The tech billionaire's aerospace company has benefited from nearly $19.8 billion in federal contracts since 2008.

A majority of that money − $14.4 billion − went to NASA and $5.32 billion went to the Defense Department to pay for SpaceX rocket launches and satellites.

Fiscal year 2024 was the largest on record for SpaceX, aided by at least $3.8 billion in U.S. government contracts.

SpaceX is also a U.S. contractor for use in Germany, Great Britain, Italy and Turkmenistan.

Contributing: Nick Penzenstadler and Reuters

Reach Rachel Barber [email protected] and follow her on X @rachelbarber_