Tesla’s shares rose Friday after Elon Musk suggested he was open to making amends with President Donald Trump, easing tensions after their simmering feud erupted into a public war of words a day earlier.
The chief executive of Tesla and SpaceX agreed with a user on social media platform X that he should “cool off and take a step back for a couple days.” Later, in a separate reply to billionaire Bill Ackman, an ally of Trump and Musk who said they should “make peace for the benefit of our great country,” Musk responded that Ackman was “not wrong.”
Tesla shares climbed 4.3 per cent. The stock had plunged 14 per cent on Thursday, its biggest decline in almost three months, wiping out $153 billion from the electric-vehicle maker’s market value.
Investors had been spooked by the prospect of a falling-out between Musk, who oversees a vast business empire, and Trump, whose government doles out billions to those companies. The president said Thursday that he was “very disappointed” in Musk’s criticism of his tax policy bill and that he had asked the Tesla leader to leave the administration.
Musk fired back in several social media posts, saying in one that “without me, Trump would have lost the election.” Musk went a step further, saying he would decommission a SpaceX craft used by the US – a threat he walked back late Thursday.
The spectacle of the world’s richest person and the leader of the free world lobbing insults toward one another on social media marked a stunning break-up of a once formidable political alliance.
Ross Gerber, the CEO of Tesla shareholder Gerber Kawasaki, sharply criticised Musk’s behaviour on Thursday, saying it could lead to lawsuits from the automaker’s investors and cut the value of SpaceX in half.
“Elon isn’t functioning to the benefit of his shareholders,” said Gerber. The meltdown is leading to the “dismantling of the Musk empire in real time.”
The conflict has raised the spectre of Trump wielding government powers to retaliate against Musk’s companies, similar to actions the president has taken to attack other perceived enemies such as Harvard University.
It also injects doubts about whether Trump’s administration will deliver key policy changes Musk has sought – namely, a framework that would liberalise deployment of autonomous vehicles that Musk has said are critical to Tesla’s future and its market value.
Already, policies being advanced by Trump and Republican lawmakers put are putting billions of dollars at risk for Tesla, which is by far Musk’s largest business.
Trump’s massive tax bill would largely eliminate a credit worth as much as $7,500 for buyers of some Tesla models and other electric vehicles by the end of this year, seven years ahead of schedule. That would translate to a roughly $1.2 billion hit to Tesla’s full-year profit, according to JPMorgan analysts.
After leaving his formal advisory role in the White House last week, Musk has been on a mission to block the president’s signature tax bill that he described as a “disgusting abomination.”
Tesla didn’t respond to requests for comment.
Separately, Trump has intensified his attacks on Jay Powell, calling on the US Federal Reserve chair to slash interest rates by a “full point” after official figures pointed to a weakening labour market.
The US economy added 139,000 jobs in May, compared with a downwardly revised 147,000 posts added in April, according to data released by the Bureau of Labor Statistics on Friday.
“‘Too Late’ at the Fed is a disaster!” Trump wrote on his Truth Social platform following the release, using a nickname he has given to the Fed chair. “Despite him, our Country is doing great. Go for a full point, Rocket Fuel!” – Bloomberg/FT
