Tesla’s stock rises following a $152 billion selloff, but the Trump-Musk truce remains shaky

Tesla stock recovered some of the losses caused by the dispute between CEO Elon Musk and US President Donald Trump, despite the fact that a truce seemed unlikely on Friday when a White House official stated that the president was not interested in speaking with his erstwhile partner.

After a sharp decline in the previous session that erased $152 billion in market value due to a verbal spat between the world’s richest and most powerful man over the tax and spending measure, the stock (TSLA.O) opened at roughly 4%.

According to a Politico article earlier, Musk and Trump were expected to speak later today. Musk agreed with demands for a detente from users on X, indicating that he was amenable to reducing tensions with the president.

On Friday, however, Trump told CNN, “I’m not even thinking about Elon,” adding that the billionaire “has a problem.”

Musk intensified his criticism of Trump’s comprehensive tax bill on Thursday, suggesting that the well-liked $7,500 EV tax incentive would be completely eliminated by the end of 2025.

In retaliation, Trump proposed reducing government contracts with Musk’s businesses, such as SpaceX, a manufacturer of rockets.

“It may be a little too optimistic to believe that their relationship will ever return to its previous state, but if calmer heads prevail and the tension subsides, that would undoubtedly be a significant improvement for Tesla,” stated Matthew Britzman, an analyst at Hargreaves Lansdown and a Tesla shareholder.

Valuation of Lofty Stock

There could be several obstacles for Tesla and the rest of Musk’s vast economic empire if he and Trump have an open conflict.

The U.S. Transportation Department controls regulations for vehicle design and would have a significant influence on Tesla’s ability to mass-produce robotaxis without steering wheels and pedals.

An inquiry was not immediately answered by Tesla.

Tesla’s shares fell 14% on Thursday, bringing its year-to-date decline to 26.9%. The shares are still trading at 120 times projected earnings, which is a high multiple when compared to other manufacturers and even tech titans like Nvidia (NVDA.O), according to a new tab.

Since Musk endorsed Trump’s candidacy for president in July of last year, the shares have been experiencing a wild ride. They first rose as investors placed bets on decreased regulatory pressure on robotaxis, but they fell as a result of weak sales and negative brand perception brought on by Musk’s political views.

While analysts anticipated that a liberal boycott would be countered by stronger sales from prospective Republican customers, Musk’s recent moves could also weaken that buffer.

“There is no one left to support consumer sentiment towards Tesla after Musk alienated Republicans, which could lead to a full-scale collapse in brand perception,” said Evan Roth Smith, a political strategist and co-founder of Slingshot Strategies.