Tesla shares clawed back from steep losses as a war of words between CEO Elon Musk and President Donald Trump appeared to cool, easing investor worries about the likely political fallout on the electric automaker.
Shares rose about 5 percent in early trading. Politico had reported Musk and Trump were expected to speak on Friday, but a White House official told Reuters there were no plans for a call.
Musk signaled on his X social media platform he was open to easing tensions with Trump, agreeing with comments from hedge fund manager Bill Ackman calling for a detente.
The spat between the world’s most powerful man and its richest erased more than $150 billion from Tesla’s market value on Thursday, the company’s biggest drop in one session.
Short-sellers, or investors betting against the stock, pocketed nearly $4 billion from the drop, the second-biggest single-day of profit on record, according to data from Ortex.
Tensions escalated after Musk stepped up criticism of Trump’s sweeping tax and spending bill, which proposes largely ending the $7,500 EV tax incentive by the end of 2025.
Lofty Stock Valuation
An open clash with Trump could pose multiple hurdles for Tesla and the rest of Musk’s sprawling business empire.The 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 percent this year after a 14 percent 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.
