Tesla’s clean energy business, once a quietly growing part of Elon Musk’s corporate empire, is facing its most serious political threat yet — a direct result, many observers say, of Musk’s vocal alignment with the American Right and the Republican Party’s aggressive push to dismantle climate policies.

House Republicans last week passed a sweeping reconciliation bill that seeks to unravel much of the Inflation Reduction Act (IRA), the landmark 2022 law that unlocked billions in clean energy tax credits. If passed by the Senate in its current form, the bill would slash incentives for both residential and utility-scale solar — incentives that have powered Tesla Energy’s rapid rise amid softening demand for its electric vehicles.

Tesla’s solar and energy storage unit reported $2.7 billion in revenue in the first quarter of 2025, up 67% from a year earlier. But that surge now hangs in the balance. The proposed bill would end residential solar credits four years earlier than planned and impose immediate constraints on developers, requiring construction to begin within 60 days of the law’s passage.

In public, Tesla has issued pleas for a “sensible wind down” of the tax credits to avoid undercutting deployment of solar and grid-scale batteries, which the company says are essential to American energy independence and the country’s ability to support rising AI-powered infrastructure.

Musk’s Alliance with the Right

But behind the industry backlash lies a political calculus that is increasingly scrutinizing Elon Musk himself — a billionaire entrepreneur whose public allegiance to Trump and the far-right policy orbit is now being viewed as self-defeating.

Over the past two years, Musk has openly embraced key figures of the American Right, including Donald Trump, whose administration has made fossil fuel expansion a top priority. Musk has amplified far-right influencers on X (formerly Twitter), rolled back misinformation rules that had been used to curb climate denial, and criticized environmental regulations and government subsidies — even as his companies continue to benefit from both.

While Tesla was founded on the premise of accelerating the world’s transition to clean energy, its CEO has increasingly positioned himself in a political lane hostile to those very goals. That contradiction is now coming to a head.

Trump-era figures and many Republicans in Congress have never disguised their skepticism — or outright hostility — toward green subsidies. Trump himself has routinely mocked electric cars, dismissed climate change as a hoax, and rolled back Obama-era fuel efficiency rules during his first term.

Now again, Trump and the GOP lawmakers have stepped up efforts to undercut the climate law that President Joe Biden made a centerpiece of his economic agenda. That law has catalyzed more than $300 billion in clean energy investments nationwide.

Musk, despite knowing the risks, has remained a vocal supporter of the movement seeking to tear it down.

Growing Apathy and Market Fallout

This has also affected Tesla, shifting the EV’s support base. Once hailed as a climate hero and innovation icon, Musk’s image has become polarizing, especially among younger, left-leaning climate-conscious consumers who once made up Tesla’s core market.

Surveys show declining enthusiasm for Tesla among Democrats and centrists. Meanwhile, Republican-led attacks on the EV industry, from rolled-back fuel standards to derailed charging infrastructure plans, have left Tesla exposed to a hostile political climate it arguably helped shape.

On Wall Street, the signs are already visible. Solar stocks have plummeted this year amid fears that the IRA’s provisions may be repealed. Enphase is down 45%, Sunrun has dropped 25%, and First Solar is off by 15%. Tesla’s energy arm, heavily reliant on those same credits, faces similar headwinds.

The irony is that Tesla, often cited as the single biggest success story of the clean energy transition — is now lobbying frantically to preserve policies that its CEO has politically abandoned.

“Abruptly ending the energy tax credits would threaten America’s energy independence and the reliability of our grid – we urge the Senate to enact legislation with a sensible wind down of 25D and 48E,” Tesla Energy wrote.
“This will ensure continued speedy deployment of over 60 GW capacity per year to support AI and domestic manufacturing growth.”

But many Senate Republicans appear unmoved, and Democrats have only a narrow majority with which to fight off the repeal effort. The reconciliation bill’s future remains uncertain, but the political climate is undeniably shifting against Tesla — and much of that shift can be traced to the man at the center of it all.

The Cost of Political Contradictions

Musk’s business empire was built, in no small part, on government intervention. A $465 million federal loan jumpstarted Tesla in 2009. Since 2012, Tesla has earned nearly a third of its $32 billion in profits from selling emissions credits to other automakers. The IRA’s generous tax incentives helped turbocharge its clean energy division at a moment when EV sales are weakening globally.

Yet Musk has increasingly painted government support as unnecessary or unwise, arguing that markets, not policy, should determine success. This philosophical detour, while popular in libertarian and far-right circles, now threatens to undermine the very industries he leads.

Whether the Senate preserves the IRA’s clean energy credits or allows them to be gutted, Tesla is already suffering the reputational and strategic fallout of Musk’s political choices. And with Trump’s influence growing again on Capitol Hill, the pressure on Tesla’s energy division, once its quiet success story, appears to only just beginning.

The African Development Bank (AfDB) has sounded fresh alarms over Nigeria’s rising debt burden, warning that the country may spend as much as 75% of its revenues on interest payments alone in 2025—a level that risks choking public spending and stalling economic recovery.

The warning is contained in the AfDB’s 2025 African Economic Outlook, which highlights how countries with seemingly manageable debt-to-GDP ratios can still face unsustainable debt conditions when revenues are persistently low and debt servicing costs rise sharply.

“Nigeria presents a classic case in point. In 2025, the country’s public debt was projected at 47 percent of GDP. In contrast, three quarters of federal government revenues were projected to be spent on federal government interest payments,” the report stated.

This latest caution from Africa’s leading development finance institution comes as President Bola Tinubu’s administration pursues an aggressive borrowing agenda that could push Nigeria’s total public debt above N180 trillion in the coming months.

The Tinubu administration said it is seeking $21.5 billion in new external loans, alongside a N758 billion bond issuance and an additional $2 billion in domestic borrowing, to fund critical infrastructure projects and settle legacy obligations such as pension arrears.

The government has defended the move, citing urgent national needs, including financing infrastructure gaps, modernizing transport systems, completing energy projects, and addressing long-standing public sector liabilities like unpaid pensions. But experts warn that the sheer scale of the proposed borrowing could significantly worsen the country’s debt outlook.

If approved and drawn down, these facilities—especially the dollar-denominated loans—could catapult Nigeria’s total debt stock beyond N180 trillion, up from N144.7 trillion, as of December 2024, according to the Debt Management Office (DMO).

Although the AfDB acknowledges that Nigeria’s debt-to-GDP ratio of 47% may appear sustainable when compared to some advanced economies, it insists that the real concern lies in the country’s weak revenue base, which leaves little room for fiscal maneuverability.

“Debt interest and amortization payments are not necessarily tied to the size of GDP but are made from government revenue,” the report stated, warning that such conditions can create a situation where governments are locked into repaying loans without sufficient funds left for development or essential services.

The Bank further noted that while some African countries benefitted from declining debt ratios between 2022 and 2023 due to favorable interest-growth dynamics, this trend is fragile and could easily reverse if economic growth slows or global interest rates rise. “Reckless fiscal behavior and excessive borrowing, especially on commercial terms, could undermine progress,” it warned.

Foreign Reserves Under Pressure from Debt Payments

New data from the Central Bank of Nigeria (CBN) shows that $2.01 billion was spent on external debt servicing between January and April 2025, a 50% surge from $1.33 billion in the same period in 2024.

Debt servicing accounted for 77.1% of total international payments made by the government in the first four months of 2025, compared to 64.5% in the corresponding period the year before. Overall FX outflows during the period stood at $2.60 billion, with external debt repayment alone wiping out a significant portion of Nigeria’s dollar reserves.

The consequence is a growing crowding out of other critical FX needs, including trade transactions, education remittances, medical tourism, and industrial imports. The country’s reserves were depleted by $3 billion in just four months, largely to service maturing external obligations.

Future Debt Trap Looms

Experts are increasingly warning that unless the Tinubu administration recalibrates its fiscal strategy, Nigeria risks falling into a debt trap, where new loans are simply used to refinance old ones, leaving the country with little to no room for actual investment.

Already, the debt service-to-revenue ratio is among the highest in the world, and the cost of debt—both in naira and foreign currency—continues to rise. The naira’s devaluation since the unification of the FX market in mid-2023 has further inflated the domestic currency equivalent of Nigeria’s external debt, compounding repayment pressures.

The World Bank and International Monetary Fund have previously cautioned Nigeria to increase its domestic revenue mobilization and cut back on non-essential borrowing. Despite these warnings, the Tinubu administration maintains that borrowing remains crucial for delivering on its infrastructure and welfare agenda.

Economists warn that in the short term, these ambitious borrowing plans if pursued without complementary fiscal reforms and transparent execution, could worsen Nigeria’s debt profile, limit capital investment, and strain the economy’s already fragile recovery path.