Tesla Inc. (NASDAQ: TSLA) stocks staged a notable rebound on Friday, rising nearly 5% in early trading after suffering one of the worst single-day losses in the company’s history. The electric vehicle giant, led by CEO Elon Musk, had lost over $150 billion in market value on Thursday following an escalating public feud between Musk and former U.S. President Donald Trump.
By 8:03 PM IST (10:33 AM ET), Tesla stocks had climbed 4.35% to $297.02, signaling some investor optimism that tensions between the billionaire entrepreneur and Trump could ease. The stock had plunged more than 14% the previous day, the steepest daily drop since Tesla went public.
The rebound followed a report from Politico suggesting that a call between Musk and Trump or White House officials may be in the works. While a White House official later denied the report, the market seemed to react positively to any hint of detente. CNN also quoted Trump saying he was “not even thinking about Elon Musk” and had no plans to speak to him “for a while.”
Feud Erupts Over Tax Bill, Contracts, and Clean Energy Incentives
The rift between Musk and Trump erupted earlier this week over the GOP’s flagship legislation dubbed the “One Big Beautiful Bill,” a sweeping tax and domestic spending proposal aimed for a July 4 vote. Musk publicly criticized the bill, calling it “outrageous,” “pork-filled,” and a “disgusting abomination” in a series of posts on X (formerly Twitter). He also warned that it would erase cost-saving efforts by the Department of Government Efficiency (DOGE)—an initiative Musk has championed—and balloon the U.S. deficit by $2.5 trillion.
One key point of contention is the bill’s plan to phase out the $7,500 EV tax credit by the end of 2025, which could impact Tesla’s sales outlook. Musk proposed a leaner version of the bill that maintains cuts to clean energy incentives while reducing other spending.
In retaliation, Trump reportedly threatened to revoke federal contracts with Musk’s companies, including Tesla and SpaceX. Meanwhile, Musk escalated the conflict, even suggesting that Trump should be impeached and reposting past criticism of Trump’s spending record. Trump responded by expressing “disappointment” in Musk, effectively ending what was once a mutually supportive relationship.
Despite the heated exchange, market analysts remain cautiously optimistic. Fiona Cincotta, senior market analyst at City Index, said, “It’s unlikely that Trump will follow through on threats to cut government contracts. This seems more like a war of words than a real policy shift.”
Markets Stay Strong Despite Drama
Tesla’s rebound came amid broader gains across U.S. markets. As of the latest session, the Dow Jones Industrial Average was up 480.74 points (1.14%), closing at 42,800.48, while the Nasdaq Composite climbed 238.96 points (1.24%) to 19,537.41. Other top movers included NVIDIA (+1.59%), Apple (+1.53%), Palantir (+4.16%), and Amazon (+1.88%).
While it’s still unclear how the Musk-Trump feud will impact Tesla’s long-term trajectory, Friday’s recovery suggests that investors believe the drama may not derail the company’s fundamentals—at least for now.