Tesla stock climbed on Friday after news broke that officials at the White House arranged a call with CEO Elon Musk in an effort to ease tensions following a public clash with U.S. President Donald Trump.
The feud escalated after Trump suggested he might halt federal contracts with Musk’s businesses, while Musk responded by calling for Trump’s impeachment. Their dispute quickly spilled over into a heated exchange on social media.
Despite dropping 14.3% the day before—wiping out around $150 billion in market value—Tesla shares were up approximately 5% in Frankfurt trading. Market observers attributed the rebound to growing sentiment that the political spat may not lead to concrete action.
“It’s doubtful that federal subsidies or contracts with Tesla will actually be cut. These appear to be more like empty threats,” said Fiona Cincotta, senior analyst at City Index. “This seems more like a temporary war of words rather than something with long-term implications.”
Experts also noted that the previous day’s steep sell-off wasn’t driven solely by the Musk-Trump conflict. Other factors included an overextended rally after Tesla’s Q1 earnings, waning market share in China and Europe, and tempered expectations for the company’s upcoming Robotaxi event in Austin.
“Much of the pullback reflects a broader reassessment of the stock,” said Garrett Nelson, senior equity analyst at CFRA Research. “We’re maintaining a ‘Hold’ rating, anticipating continued volatility. Buckle up!”
Tesla stock, which previously surged when Trump won the presidency in 2016, has since taken a hit. Musk’s alignment with cost-cutting efforts in Washington has reportedly strained Tesla’s appeal among some investors and customers.
Although the company remains part of the so-called “Magnificent 7” group of tech giants, its market capitalization has slipped. Tesla now ranks behind both Berkshire Hathaway and Broadcom, and has dropped out of the exclusive club of companies valued over $1 trillion.
The broader market also reacted to the political rift on Thursday, with indexes dipping. But by Friday morning, optimism over a potential de-escalation lifted investor sentiment, and S&P 500 futures rose 0.4%.
“Elon Musk seems willing to let things cool down, which may help limit the fallout,” said Kathleen Brooks, research director at XTB. “Any further risk is likely to remain focused on Tesla in the near term.”
