Tesla (TSLA) shares rose 4% on Friday, clawing back some losses from a steep selloff that erased $152 billion in market value. The rebound followed a sharp drop sparked by a public feud between CEO Elon Musk and former ally President Donald Trump, though signs of a truce remained elusive.
While a Politico report suggested the two might speak later in the day, a White House official said Trump had no intention of reaching out. On CNN, the former president dismissed the idea, saying, “I’m not even thinking about Elon,” and adding that the billionaire “has got a problem.”
The conflict erupted over Trump’s proposed “Big Beautiful Bill”, a massive tax-and-spending package. Trump claimed Musk had supported the plan—but Musk refuted this, posting on X (formerly Twitter): “False, this bill was never shown to me even once and was passed in the dead of night.”
The conflict escalated Thursday after Musk intensified criticism of Trump’s tax and spending bill, which includes a proposal to phase out the $7,500 EV tax credit by the end of 2025. In response, Trump floated the idea of slashing federal contracts with Musk’s companies, including SpaceX.
Trump publicly expressed disappointment, stating their relationship may not recover. He threatened to revoke federal contracts and subsidies to Musk’s companies, including Tesla and SpaceX.
Musk responded fiercely—calling the bill “disgusting,” dismissing Trump’s claims, and accusing the administration of failing to release Epstein-related files. He even supported Trump’s impeachment on X.
“It might be overly optimistic to expect their relationship to return to what it once was,” said Tesla investor Matthew Britzman, an analyst at Hargreaves Lansdown. “But even a cooling of tensions would be a positive development for Tesla.”
The fallout could have significant implications for Tesla, particularly given the Transportation Department’s influence over vehicle standards—an important factor as the company aims to mass-produce fully autonomous robotaxis.
Tesla declined to comment on any potential discussion between Musk and Trump.
Despite Friday’s bounce, Tesla shares are still down 29.5% year-to-date, including a 14% plunge on Thursday alone. The stock trades at roughly 120 times forward earnings—a rich valuation compared to other automakers and even high-growth tech names like Nvidia.
Tesla stock has been volatile since July, when Musk publicly backed Trump’s presidential bid. While that initially fueled optimism about reduced regulatory scrutiny, weak sales and backlash over Musk’s political positions have since dampened investor sentiment.
Some had hoped growing support among Republican consumers would offset liberal boycotts, but analysts warn that recent developments may erode that base as well.
“With Musk alienating Republicans, there’s no one left to shore up Tesla’s consumer brand,” said Evan Roth Smith, co-founder of Slingshot Strategies. “That opens the door to a full-scale collapse in public perception.”
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