Introduction
Tesla shares have managed to recover some losses following a public spat between CEO Elon Musk and U.S. President Donald Trump. Despite this rebound, the future of their relationship remains uncertain as tensions persist.Context
On June 6, the stock rose nearly 4% after a steep decline in the previous session, which erased $152 billion in market value. This turbulence was sparked by a back-and-forth exchange between the two influential figures over a tax and spending bill. The day prior, a report indicated that Trump and Musk were likely to speak, with Musk appearing open to reconciliation on social media.However, Trump dismissed any significance of Musk's statements, mentioning in an interview that he was "not even thinking about Elon" and implying that Musk faced challenges.
Developments
Tensions escalated after Musk criticized Trump's tax legislation, which threatens to eliminate the popular $7,500 electric vehicle tax incentive by the end of 2025. In retaliation, Trump proposed cuts to government contracts with Musk’s companies, including his rocket manufacturing business.Matthew Britzman, a Tesla shareholder and analyst at Hargreaves Lansdown, noted that while a return to their previous relationship seems unlikely, a de-escalation could significantly benefit Tesla.
An ongoing dispute with Trump poses substantial challenges for Tesla and Musk's broader business ventures. The U.S. Transportation Department, responsible for regulating vehicle design standards, could influence Tesla's ability to produce robotaxis that lack traditional driving controls.
Tesla has yet to respond to requests for comment regarding this situation.