Tesla shares gain after $152 billion selloff
Agencies
New York
Tesla shares recouped some losses that had been triggered by a spat between CEO Elon Musk and US President Donald Trump, even though a truce appeared uncertain on Friday as a White House official said the president was not keen on talking to his former ally.
The stock rose nearly 4 percent after a steep fall in the previous session, that wiped out $152 billion in market value, when the world's most powerful man and its richest publicly entered a war of words over the tax and spending bill.
Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter.
Earlier, a Politico report had said Trump and Musk were likely to talk later in the day. Musk had signalled on X he was open to easing tensions with the president, agreeing with calls for a detente from users on the social media platform.
But Trump told CNN on Friday, 'I'm not even thinking about Elon,' adding the billionaire has 'got a problem'.
Tensions escalated on Thursday after Musk stepped up his criticism of Trump's sweeping tax bill, which proposed largely ending the popular $7,500 EV tax incentive by the end of 2025.
In response, Trump suggested cuts to the government's contracts with Musk's companies, including rocket maker SpaceX.
'It might be a bit too hopeful to think their relationship will ever go back to what it once was, but if cooler heads prevail and the tension eases, that would definitely be a big improvement for Tesla,' said Tesla shareholder Matthew Britzman, who is an analyst at Hargreaves Lansdown.
An open clash with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire.
The US Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels.
Tesla did not immediately respond to a request for comment. Tesla stock is down 26.9 percent this year following a 14 percent drop on Thursday. Still, the shares trade at 120 times expected earnings, a lofty multiple compared to other automakers and even tech giants such as Nvidia. The shares have been on a turbulent ride since last July when Musk backed Trump's White House bid. They surged initially as investors bet on less regulatory pressure for robotaxis, but tumbled due to soft sales and brand fallout from Musk's political stance.
Stronger sales from potential Republican customers were expected to offset a liberal boycott, but analysts warned that Musk's recent actions may erode that buffer too.
'With Musk alienating Republicans, there is no one left to prop up consumer sentiment towards Tesla, which could lead towards a full-scale collapse in brand perception,' said political strategist Evan Roth Smith, co-founder of Slingshot Strategies.
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