US President Donald Trump has hit out at former close ally Elon Musk over the multi-billionaire's plan to launch a new political party.

"I am saddened to watch Elon Musk go completely 'off the rails,' essentially becoming a train wreck over the past five weeks," Trump posted on his Truth Social platform on Sunday.

After teasing the idea for weeks, Musk posted on X over the weekend that he had set up the America Party to compete against the Republican and Democratic parties.

The Tesla boss's announcement comes weeks after a dramatic falling out with Trump, who appointed Musk to lead the Department of Government Efficiency (Doge), which is tasked with identifying areas to cut federal spending.

In his post, Trump also took aim at Musk's push for an "Electric Vehicle (EV) Mandate", saying it would have "forced everyone to buy an electric car in a short period of time."

Trump's tax and spending plans - which he called his "big, beautiful bill" - ends tax breaks for electric vehicles.