Tesla shares rebound amid Musk-Trump feud, outlook remains uncertain

On June 6, the Tesla shares recovered some ground after a bruising selloff sparked by an escalating feud between CEO Elon Musk and U.S. President Donald Trump, though prospects for a truce remained uncertain.

The stock rose nearly 4%, clawing back part of the June 5 steep losses that had wiped out $152 billion in market value after Musk and Trump publicly clashed over the administration’s tax and spending bill, Caliber.Az reports, citing Reuters.

A Politico report had raised hopes for a possible thaw, suggesting the two might speak. Musk also indicated on X that he was open to easing tensions, responding positively to user calls for dialogue.

However, Trump poured cold water on reconciliation hopes in an interview with CNN on June 6, saying, “I’m not even thinking about Elon,” and adding that the billionaire “has got a problem.”

The rift deepened on June 5 when Musk stepped up criticism of Trump’s sweeping tax bill, which aims to phase out the $7,500 federal electric vehicle (EV) tax credit by the end of 2025—a key driver of U.S. EV sales. In response, Trump suggested cutting federal contracts with Musk’s companies, including aerospace giant 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 Matthew Britzman, a Tesla shareholder and analyst at Hargreaves Lansdown.

An open political clash with Trump could present serious headwinds for Tesla and the rest of Musk’s vast business empire, analysts say.

Tesla shares have fallen 26.9% so far this year, including a 14% drop on June 5 alone. Despite this, the stock still trades at 120 times expected earnings—a high multiple even by tech-sector standards and well above traditional automakers.

The volatility began last July when Musk publicly endorsed Trump’s 2024 White House bid. Shares initially surged on expectations of a friendlier regulatory environment for Tesla’s self-driving and robotaxi ambitions. But the rally reversed amid weak sales and brand damage linked to Musk’s polarizing political positions.

Tesla had counted on stronger sales from Republican-leaning buyers to offset a liberal consumer backlash. But analysts now warn that Musk’s recent confrontations with Trump could further erode that fragile support.

By Khagan Isayev