Tesla stock reversed earlier losses and moved higher on Monday, kicking off a pivotal week for the EV maker as it prepares to launch its much-anticipated robotaxi test in Austin, Texas, starting June 12. The rebound comes despite fallout from a public rift between CEO Elon Musk and former President Donald Trump, which has rattled investors and drawn scrutiny from Wall Street.
Last week, Tesla shares plunged nearly 15%, wiping out over $150 billion in market value after Musk criticized a GOP-backed spending bill. The move triggered a fierce response from Trump and raised fresh concerns about the political risks surrounding Tesla due to its outspoken CEO.
Although Trump tried to ease tensions on Friday, he told NBC News over the weekend that he had “no intention” of speaking to Musk in the near future.
Tesla shares were down as much as 4% in premarket trading Monday but turned positive by midday.
The stock faced further pressure early Monday after receiving two analyst downgrades, both citing the Musk-Trump feud and the uncertainty it’s created.
Argus downgraded Tesla to Hold from Buy, with analyst Bill Selesky stating, “We are concerned that the war of words between President Trump and Elon Musk, along with expiration of EV credits, could further weaken demand for new Teslas,” though he added the firm remains positive on Tesla’s long-term potential.
Baird’s Ben Kallo also downgraded the stock to Neutral from Outperform, echoing similar concerns. “The recent incident between Musk and Trump exemplifies key-person risk associated with Musk’s political activities,” Kallo wrote, adding that the situation is creating “uncertainty to TSLA’s outlook.” He also noted that Tesla’s close relationship with government policy is a “double-edged sword,” with last week showcasing its downside.
Still, both analysts pointed to Tesla’s robotaxi test as a potential long-term catalyst.
The upcoming test will begin with 10 to 20 Tesla Cybercab robotaxis operating in an unsupervised mode. If early results are positive, the company may expand the program. Tesla plans to use remote teleoperators to assist in cases where a robotaxi encounters issues or becomes stuck in traffic—an added safety layer that may also limit rapid scaling.
Dan Ives of Wedbush, a longtime Tesla bull, emphasized the importance of the robotaxi initiative. “Rome was not built in a day … and neither will Tesla’s autonomous and robotics strategic vision,” he said, noting that setbacks are to be expected on the road to full autonomy.
Ives projected that Tesla will broaden its robotaxi testing to “20 to 25 cities” over the next year and said the company remains one of the strongest AI “pure plays” in the market.
“Given its unmatched scale and scope globally we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the US and around the globe,” Ives concluded.
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