Trump/Musk Bromance at a Crossroad as Tesla Surges 5% in Premarket Trading

[Redator]

Tesla shares (TSLA.O) recovered from big losses after tensions between CEO Elon Musk and U.S. President Donald Trump seemed to calm down, reducing investor concerns about potential political issues for the electric car company.

Musk Takes the High Road?

Tesla shares jumped as much as 5% in premarket trading after a report from Politico suggested Elon Musk and Donald Trump might talk to ease tensions. However, the stock lost some of those gains when a White House official told Reuters no call was planned for Friday.

On social media, Musk hinted he was open to making peace with Trump, agreeing with hedge fund manager Bill Ackman, who called for the two to settle their differences.

The clash between Trump and Musk, the world's richest man, wiped out over $150 billion from Tesla's market value on Thursday, marking the company's biggest one-day loss ever. Investors betting against Tesla's stock made nearly $4 billion in profits from the drop, the second-largest single-day gain for short-sellers, according to Ortex data.

The tensions grew after Musk criticized Trump's tax and spending bill, which aims to end the $7,500 electric vehicle tax credit by late 2025. In response, Trump suggested cutting government contracts with Musk's companies, including SpaceX.

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Source: LSEG

As things stand Elon Musk does appear ready to bury the hatchet somewhat in his feud with President Trump.

Musk said President Trump's tariffs would lead to a recession in the second half of 2025 while mentioning Trump's supposed connection to Jeffrey Epstein. Musk replied to Bill Ackman who said the two men should make peace for the benefit of our great country with the words “you’re not wrong”. This has been interpreted by many as Elon Musk extending an olive branch in the spat.

Tesla Contracts and Subsidies

Yesterday's selloff had a lot to do with fears around President Trump's threats to cut off subsidies and government contracts with Tesla. These much like trade deals are unlikely to come to fruition but the share price still remains lower than at the beginning of the feud.

Was this just a catalyst which brought sellers to the fore? There are rumblings that the selloff may have also been down to market share-losses in Europe and China as well as a potential lackluster launch of the Robotaxi, which is scheduled for next week in Austin Texas.

If the tit-for-tat remains a simple war of words there shouldn't be any more volatile moves like yesterday. This however does not mean that Tesla shares are out of the woods just yet.

Tesla Daily Chart, June 6, 2025

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Source: TradingView.com

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