Tesla stock rises as it rebounds from Trump-Musk public feud
The rebound for Tesla comes after shares in Elon Musk's electric vehicle company plunged by more than 14% in a stunning wipeout on Thursday, as investors dumped their holdings amid a bitter war of words between the president and the world's richest man.
By the end of the trading day, $150 billion (€139bn) of Tesla's market value had been erased — more than what it would take to buy all the shares of Starbucks and hundreds of other big publicly traded US companies.
However, by Friday afternoon, Tesla's share price was back in the green, up 4.63%, as of 16:38 CEST.
The disagreement started over the president's budget bill, then quickly turned nasty after Musk said that Trump wouldn't have been elected without his help. Trump then implied that he may turn the federal government against Musk's companies, including Tesla and SpaceX.
'The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon's Governmental Subsidies and Contracts,' Trump wrote on his social messaging service Truth Social. 'I was always surprised that Biden didn't do it!'
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The latest volatility for Tesla also follows a big run-up in the eight weeks since Musk confirmed that Tesla would be testing an autonomous, driverless 'robotaxi' service in Austin, Texas, this month.
Investors fear Trump might not be in such a rush to usher in a future of self-driving cars in the US, and that could hit Tesla.
'The whole goal of robotaxis is to have them in 20 or 25 cities next year," Wedbush Securities analyst Dan Ives, said. "If you start to heighten the regulatory environment, that could delay that path.'
He added that there's a fear Trump is not going to play 'Mr Nice Guy' anymore.
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However, Trump's threat to cut government contracts could be aimed more at another of Musk's businesses, SpaceX. The privately held rocket company has received billions of dollars for sending astronauts and cargo to the International Space Station, providing launches and doing other work for NASA. The company is currently racing to develop a mega-rocket for the space agency to send astronauts to the Moon next year.
A subsidiary of SpaceX, the satellite internet company Starlink, appears to also have benefited from Musk's once-close relationship with the president.
On a trip with Trump to the Middle East last month, Musk announced that Saudi Arabia had approved Starlink for aviation and maritime use. Though its not clear how much politics has played a role, a string of other recent deals in Bangladesh, Pakistan, India and elsewhere has followed, as Trump has threatened tariffs and sent diplomats scrambling to please the president.
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One measure of SpaceX's success: A private financing round followed by a private sale of shares in recent months reportedly valued it at $350 billion (around €325bn), up from an estimated $210 billion (about €195.3bn) a year ago.
Now all that is possibly in danger. Tesla shares got an even bigger lift from Musk's close relationship with Trump, initially at least.
After the presidential election in November, investors rushed into the stock, adding more than $450 billion (€418.5bn) to its value in a few weeks. The belief was that the company would see big gains as Trump eased regulatory oversight of Tesla. They also bet that the new administration would embrace Musk's plans for millions of cars on US roads without drivers behind the wheel.
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After hitting an all-time high on 17 December, the shares retreated as Musk's time as head of a government cost-cutting group led to boycotts and a hit to Tesla's reputation. They then recently popped higher again after Musk vowed to focus more on Tesla and its upcoming driverless taxi launch.
Now investors aren't so sure, a worry that has translated into much market volatility for Tesla.
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