Tesla's three-day rally erases most of selloff from Musk-Trump feud
In the three trading days since Elon Musk's war of words with President Donald Trump last week sank Tesla's market cap by 14% in a single session, the stock has rallied almost all the way back.
Tesla shares rose 5.7% on Tuesday to close at $326.09 on Tuesday, leaving the stock about $6 short of where it was trading last Wednesday, before the Musk-Trump brouhaha exploded across social media.
The latest jump came after Musk shared a video on X showing that Tesla was testing driverless vehicles on the roads of Austin, Texas, without a human safety supervisor behind the wheel. The eight-second clip showed the latest version of the Model Y SUV, painted black with a white "Robotaxi" graffiti-style logo painted on it, navigating an intersection and pausing to allow pedestrians to traverse a crosswalk.
After years of delays and unfulfilled promises left Tesla well behind rivals like Alphabet's Waymo in the robotaxi market, Musk's company finally appears poised to put its autonomous driving technology on public streets, even if in a very limited capacity to start. Bloomberg previously reported that Tesla is expected to officially launch its "pilot" for a driverless ride-hailing service in Austin on June 12, though the company hasn't confirmed the timing beyond saying that it's coming in June.
Musk recently told CNBC's David Faber that Tesla will start with a very small rollout, including about 10 to 20 of its robotaxis, with a new, "unsupervised" version of the company's FSD or "Full Self-Driving" technology installed. The tests will involve the Model Y, not the futuristic looking CyberCab that Tesla plans to produce next year.
Musk said Tesla will "geofence" the service, limiting where the robotaxis can initially operate, and that employees will remotely monitor the fleet.
Tesla is now listed as "testing" on an official website for the city of Austin, EV fan blog Teslarati first reported. The site shares information about autonomous vehicle companies operating in Austin.
Waymo, which operates a commercial fleet in the Texas capital, is the only autonomous vehicle maker listed with a "deployment" designation, rather than "mapping" or "testing" on the Austin site. The company also has commercial robotaxi services running in parts of the San Francisco Bay Area, Phoenix, and Los Angeles.
In Austin, Amazon's Zoox is listed as testing, as is AVRide, a self-driving vehicle developer that spun out of Russian tech firm Yandex.
Sawyer Merritt, a Tesla promoter and fan, originally posted the clip of the Model Y operating on FSD-Unsupervised in Austin.
"BREAKING: First ever Tesla Model Y robotaxi with no-one in the drivers seat spotted testing on public roads in Austin, Texas!" Merritt wrote on X.
Musk shared the post, adding, "Beautifully simple design." He later wrote, "These are unmodified Tesla cars coming straight from the factory, meaning that every Tesla coming out of our factories is capable of unsupervised self-driving!"
Musk, the world's richest person, is coming off a bruising week. After his term running the Trump Administration's Department of Government Efficiency (DOGE) officially came to an end, Musk and the president began feuding, partly due to the contents of the spending bill that's being debated in congress. The spat turned personal on Thursday, with both men hurling insults at each other from their respective social media platforms.
The stock was already getting hit but took a sharp turn lower after Trump said Musk had gone "CRAZY" and threatened to end government contracts and cut off subsidies for his companies. In addition to Tesla, Musk also runs defense contractor SpaceX, artificial intelligence startup xAI (which owns X), health tech company Neuralink and drilling venture The Boring Company.
While Trump said he "would assume" his relationship with Musk is over, the president is known to for his transactional approach. The stock bump early this week may be in part a reaction to a more contrite Musk, who has deleted some of the most pointed insults that he previously lobbed at Trump, and has appeared to endorse the president on other policy matters like immigration.
Tesla investors have been urging Musk to refocus his attention on the electric car maker after a brutal first quarter that saw automotive revenue plunge 20% due to increased competition from lower-cost EV makers in China and a consumer backlash to Musk's political activities and rhetoric. In key markets throughout Europe and China, Tesla's year-over-year sales declined in the first two months of the second quarter.
In a report to clients on Tuesday, analysts at Piper Sandler wrote, regarding driverless cars being spotted in Austin, that "a key component of our TSLA thesis has officially begun playing out." The firm has a buy rating on the stock.
Philip Koopman, an auto safety researcher and associate professor of computer engineering, told CNBC that investors shouldn't get too carried away at the sight of Tesla running driverless vehicles on public roads.
"We don't know enough from the company, or from this clip, to know if these vehicles are going to be safe, how they operate and what it costs," Koopman said, referring to the video shared by Musk. He said he expects Tesla to rely heavily on so-called "remote assistants," or people who watch the company's robotaxis from a computer in a service center, with the ability to take over control if needed.
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