US President Donald Trump has slammed former ally Elon Musk's launch of a new political party as "ridiculous," deepening the Republican's feud with the man who was once his biggest backer.

Trump also branded the SpaceX and Tesla tycoon a "TRAIN WRECK" who had gone "off the rails" after Musk said he wanted to challenge the current US political system.

The world's richest man was almost inseparable from Trump as he headed the cost-cutting Department of Government Efficiency (Doge), but they fell out hard over the president's "big beautiful" tax and spending mega-bill.

"I think it's ridiculous to start a third party," Trump said before boarding Air Force One on his way back to Washington from his New Jersey golf club.

"It's always been a two-party system, and I think starting a third party just adds to confusion. Third parties have never worked. So he can have fun with it, but I think it's ridiculous," he said.

South African-born Musk announced on Saturday that he would create the so-called "America Party" to challenge what he called the "one-party system".

Musk gave few details of his plan and it was not clear whether he had registered the party with US electoral authorities, but it could cause Republicans headaches in the 2026 midterm elections – and beyond.

In a sign of how sensitive the issue could be for Trump, he took to his Truth Social network while still on Air Force One to double down on his assault on Musk.

"I am saddened to watch Elon Musk go completely 'off the rails,' essentially becoming a TRAIN WRECK over the past five weeks," Trump posted.

"The one thing Third Parties are good for is the creation of Complete and Total DISRUPTION & CHAOS, and we have enough of that with the Radical Left Democrats."

In a lengthy diatribe, Trump repeated his earlier assertion that Musk's ownership of electric vehicle company Tesla had made him turn on the president due to the spending bill cutting subsidies for such automobiles.

Musk has insisted that his opposition is primarily due to the bill increasing the US fiscal deficit and sovereign debt.

Earlier on Sunday, Treasury Secretary Scott Bessent also threw shade at Musk's attempts to enter the political fray, telling him to stick to running his companies.

When asked by CNN if Musk's plan bothered the Trump administration, Bessent offered thinly-veiled criticism.

"I believe that the boards of directors at his various companies wanted him to come back and run those companies, which he is better at than anyone," he said. "So I imagine that those board of directors did not like this announcement yesterday and will be encouraging him to focus on his business activities, not his political activities."

Musk left Doge in May to focus full-time on his corporate responsibilities, with Tesla's sales and image especially suffering from his brief venture into Trump's inner circle. (AFP)