Published by Global Banking & Finance Review®
Posted on June 6, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleTesla shares recover after a $152 billion selloff amid tensions between Elon Musk and Donald Trump. The stock rose 4%, but uncertainty remains over their relationship.
(Reuters) -Tesla shares recouped some losses triggered by a spat between CEO Elon Musk and U.S. President Donald Trump, although 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 4% 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.
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.
LOFTY STOCK VALUATION
An open clash with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire.
The U.S. 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 on the call.
Tesla stock is down 29.5% this year after a 14% 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.
(Reporting by Akash Sriram and Shashwat Chauhan in Bengaluru, Amanda Cooper and Samuel Indyk in London; Additional reporting by Purvi Agarwal; Editing by Tomasz Janowski and Arun Koyyur)
The selloff was triggered by a public dispute between CEO Elon Musk and U.S. President Donald Trump over a proposed tax bill that could end the EV tax incentive.
Tesla lost $152 billion in market value during the steep decline in its stock price.
Tesla shares are trading at 120 times expected earnings, which is considered a lofty multiple compared to other automakers and tech giants.
Musk's criticism could alienate Republican customers and negatively impact consumer sentiment towards Tesla, potentially leading to a decline in brand perception.
While there are indications that Musk is open to easing tensions, Trump's comments suggest he is not focused on reconciling with Musk, making a truce uncertain.
Explore more articles in the Headlines category
