Tesla (TSLA) stock gained as much as 4.5% early Friday as investors looked for any signs of deescalation in the public spat between CEO Elon Musk and President Trump, which had prompted a washout erasing more than $150 billion in value from the EV maker.
White House aides told Politico and Reuters that a call was scheduled between President Trump and Musk for Friday, sparking optimism over a potential truce. These reports were later shot down by various outlets, including Reuters.
The Wall Street Journal, citing a senior White House official, said Friday morning that the president was also considering selling his red Tesla. Separately, ABC reported Trump told the outlet he was “not particularly” interested in speaking with the Tesla CEO, calling Musk “the man who has lost his mind.”
On Thursday, the formerly close allies traded barbs on social media after Trump questioned whether their relationship remained in good standing, given Musk’s attacks this week on the “big, beautiful bill” currently making its way through Congress.
Tesla stock dropped over 14% on Thursday, erasing nearly all its post-election gains as the electric vehicle maker saw its largest single-day market cap loss in its history.
Read more about Tesla’s stock moves and today’s market action.
The loss came as Musk publicly supported a call for Trump’s impeachment and claimed the president “is in the Epstein files” on his social media platform X, referring to now-deceased convicted sex trafficker Jeffrey Epstein.
Trump fired back on his own social media platform, Truth Social, calling Musk “crazy” and threatening to terminate his companies’ government contracts. That was shortly after Trump remarked during a White House meeting with German Chancellor Friedrich Merz that he was “very disappointed in Elon.” Late Thursday, Musk appeared to backtrack on his threat — apparently aimed at Trump — to decommission his company SpaceX’s Dragon spacecraft, which is used by the US to shuttle American astronauts and cargo to and from space.
“The social media and war of words back and forth is not good for anyone and put massive pressure on Tesla shares with fears that Trump will turn from friend to foe and create a tough regulatory environment for Musk in the Beltway,” Wedbush analyst Dan Ives wrote in a note to investors Friday morning, adding, “We believe cooler heads will prevail today and into the weekend (hopefully)…”
But cooler heads are not guaranteed.
The feud between Musk and Trump began shortly after Musk left D.C. and his place at the head of the temporary and highly controversial federal agency DOGE (the Department of Government Efficiency), which (unsuccessfully) aimed to cut the federal deficit by enacting mass layoffs of government workers, dismantling federal agencies, and canceling grants. Some of those actions were later ruled unlawful in courts.
Musk has been highly critical of Trump’s “big, beautiful” tax and spending bill, which is set to add more than $3 trillion to the US national debt over the next decade.
“Musk needs Trump and Trump needs Musk for many reasons and these two becoming friends again will be a huge relief for Tesla shares,” Ives said. The analyst believes the stock was “way oversold” Thursday and “this spat between Trump and Musk does not change our firmly bullish view of the autonomous future looking ahead that we value at $1 trillion alone for Tesla.”
Others on Wall Street were more cautious. CFRA analyst Garrett Nelson maintained his Hold rating and $320 price target on shares late Thursday afternoon.
Nelson wrote that, while Musk’s political turmoil fueled Tesla’s decline Thursday, “we think the stock’s sell-off reflects a number of other factors: an unjustified run-up following its Q1 earnings release, ongoing market share losses in China and Europe, and a realization that next week’s Robotaxi launch in Austin could disappoint.”
“Similar to other major Tesla events in the past, shares have appreciated sharply leading up to the event, raising the probability of a “sell the news” reaction.”
Nelson said his team is “expecting more volatility in the near term,” adding: “Buckle up!”
Separately this week, video footage released by Bloomberg of a fatal 2023 crash involving Tesla’s Full Self-Driving function cast doubt on the safety of the EV company’s technology ahead of its robotaxi launch on June 12.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
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