How New Tax Legislation Could Help and Hinder Elon Musk’s Business Empire

By: Stephen Zogal, EA

Date: 6/20/25

The sweeping tax reforms under H.R. 1 Senate bill of the new legislative proposal bring both promising incentives and serious setbacks for Elon Musk and his portfolio of companies. From Tesla and SpaceX to Neuralink and The Boring Company, Musk’s business ventures operate at the intersection of advanced research, clean energy, and domestic manufacturing—all areas heavily impacted by tax policy. This legislation delivers a mixed bag: a major benefit through restored research and development (R&D) deductions, but a significant blow through the rollback of green energy credits tied to the Green New Deal era.

Keep in mind, while the senate bill is in the process of reconciliation, it is not the current law of the U.S. until signed by President Trump. My professional thoughts on this bill is from a Tax and Accounting perspective after reading the 549 page bill.

All jokes set aside- it was a hard read and filled with tax provisions that are too long to address in one article.

A Win: Restored R&D Expensing and Bonus Depreciation for Innovation-Driven Firms

One of the most impactful changes in the bill is the reinstatement of full expensing for domestic research and experimentation (R&E) expenses. Under previous law, companies were required to amortize R&D costs over five years domestically and 15 years for foreign R&D. The new legislation also restores 100% bonus depreciation through 2029, allowing companies to immediately write off the cost of qualified capital investments such as factory equipment, robotics, and high-tech infrastructure. The new legislation allows immediate expensing for domestic R&D beginning in 2025—a major financial benefit for innovation-heavy firms like SpaceX, Neuralink, and Tesla.

These provisions allow Musk’s companies to deduct the full cost of developing new battery technologies, building advanced manufacturing lines, and purchasing capital-intensive hardware for production and testing facilities. For a business model fueled by iterative prototyping and high upfront development expenses, this reduces taxable income and boosts cash flow, enabling faster reinvestment into future innovations. It also rewards Musk's decision to concentrate much of his technological development within the United States.

A Blow: The Repeal of Green Energy Incentives

However, the legislation also delivers a setback to Musk's green-focused companies, particularly Tesla and SolarCity. The bill phases out or repeals many of the clean energy tax credits that were part of the Green New Deal framework. These include credits for electric vehicles (EVs), solar installations, and energy storage technologies—key components of Tesla’s product line and business strategy.

The repeal of these incentives could dampen consumer demand for Tesla’s vehicles and solar products by effectively increasing their relative cost compared to fossil-fuel alternatives. It could also reduce the viability of solar infrastructure projects that rely on federal tax credits to reach financial feasibility. Additionally, by eliminating the transferability of clean energy credits, the bill restricts the flexibility that helped startups and green energy firms monetize tax incentives more easily.

It could be easy to understand after reading the bill why Elon might be against it, other than the fact that it adds to the national debt and in further burdening the taxpayers, it might also provide boost the economy which in turn increase our GDP and as a result tax revenues would increase to offset. However, that is an overall view point when you take a step back to see the potential bigger picture.

Strategic Tension: Domestic Manufacturing vs. Climate Policy Rollback

The legislation does favor companies that build, hire, and produce in the U.S., aligning with Musk’s push for American manufacturing and employment. Tesla’s Gigafactories and SpaceX’s launch operations stand to benefit from enhanced deductions and domestic-focused incentives. Yet, this business-friendly stance is complicated by the withdrawal of climate-aligned policies that also underpinned Tesla’s market edge.

Musk’s long-standing advocacy for carbon neutrality and sustainability could be at odds with a tax framework that now favors traditional energy sources over renewables. This places his businesses at a crossroads: strengthened financially by R&D write-offs and domestic manufacturing incentives, but weakened in climate-policy support that has historically shaped consumer demand and investor interest in green technology.

Conclusion: Net Impact Still Significant—but Mixed

Overall, the new tax legislation presents a dual narrative for Elon Musk’s companies. It boosts innovation and cash flow through restored R&D expensing—a powerful lever for future technological breakthroughs. At the same time, it chips away at the policy foundation that helped popularize and subsidize clean technologies. As Musk continues to shape the future of transportation, energy, and space, this legislation reshapes the financial and strategic calculus behind those ambitions.