Investors pushed the Tesla gear shift back into drive to recover some of the losses sparked by the public spat between its CEO Elon Musk and United States President Donald Trump, but whether they have called a truce is in doubt.
The share price of the vehicle (EV) and solar energy group rose US$10.44 or 3.67% to $295.14 (A$454 million) on Friday (Saturday AEST), ending a seven-day slump in which the price went into reverse amid concerns about what the feud could mean for the company.
The shares suffered their biggest single-day drop on Thursday, erasing $152 billion of the company’s market value as the price slid 14%, in response to the war of words between the world’s richest man and its most powerful man.
It began with Musk leaving the administration and criticising Trump’s controversial new tax and spending bill, but exploded into a public feud with Trump threatening to punish his former ally and adviser by ending government contracts and subsidies for Tesla and Musk’s SpaceX (Space Exploration Technologies Corp).
Musk raised the stakes by threatening to decommission SpaceX spacecraft used by the National Aeronautics and Space Administration (NASA), calling for Trump’s impeachment and linking him with notorious sex offender Jeffrey Epstein.
Just as the prospects of a truce in the social media war improved when Musk signalled on his social media platform X that he was open to easing tensions with the President, Trump said: "I'm not even thinking about Elon.”
Although Tesla stock is down 27% this year, its shares are still trading at 120 times forecast earnings, which is high by the standards of other car manufacturers and even technology giants such as the world’s most valuable company, Nvidia.
Tesla is valued at $924.81 billion, making it the world’s 10th most valuable company when measured by market capitalisation.
"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," Slingshot Strategies co-founder and strategist Evan Roth Smith was quoted in a Reuters article as saying.
Musk donated about $275 million to Trump’s 2024 presidential campaign and served as the leader of the Department of Government Efficiency, charged with finding ways to cut costs for the U.S. Government.
The fall in Tesla’s share price also cut Musk’s net worth by $8.73 billion to $423 billion.
