Tesla Shares Rebound After Massive Selloff, But Trump-Musk Rift Persists

Tesla shares rose nearly 4% on Friday, recovering some ground after a USD 152 billion selloff triggered by a public feud between CEO Elon Musk and former U.S. President Donald Trump.

Credit: TESLA

The rebound followed a steep 14% drop on Thursday, as tensions escalated over Trump’s proposed tax bill, which would end the USD 7,500 electric vehicle tax incentive by the end of 2025.

Musk had criticised the bill, prompting Trump to suggest cutting government contracts with Musk’s companies, including SpaceX.

Despite a Politico report suggesting the two might speak, Trump told CNN, “I’m not even thinking about Elon,” and said the billionaire “has got a problem.”

Musk had earlier indicated on X that he was open to easing tensions, agreeing with users calling for a détente.

Tesla’s stock has fallen 26.9% this year, though it still trades at 120 times expected earnings, a high valuation compared to other automakers and tech firms like Nvidia.

The ongoing clash with Trump could create regulatory challenges for Tesla, particularly regarding the U.S. Transportation Department’s oversight of robotaxi production.

Tesla shares initially surged last year after Musk backed Trump’s White House bid, as investors anticipated reduced regulatory pressure.

However, sales softened and the brand suffered from political backlash, with analysts warning that Musk’s recent actions may alienate Republican consumers as well.

Political strategist Evan Roth Smith said Musk’s alienation of Republicans could lead to a collapse in Tesla’s brand perception.

---

• Tesla shares rose nearly 4% after a USD 152 billion selloff

• Trump dismissed the idea of reconciling with Musk

• Musk criticised Trump’s tax bill, which targets EV incentives

Source: REUTERS