In a surprising turn of events, Tesla’s stock has recovered significantly, climbing 48% since the publicly aired feud between its CEO, Elon Musk, and former U.S. President Donald Trump. This sharp rebound marks a stunning recovery from the market shock that initially wiped $150 billion from the electric vehicle (EV) giant’s valuation.
The Fallout and The Recovery
On June 5, 2025, tensions between Musk and Trump caused Tesla (NASDAQ: TSLA) shares to plummet by 14%, hitting an intraday low of $284.70. The initial reaction from investors reflected fears that the clash could lead to broader implications for Tesla’s operations and growth prospects. However, the narrative quickly shifted, as the stock began its recovery on June 6, setting the stage for a sustained summer rally.
Key Factors Behind Tesla’s Stock Comeback
Several pivotal elements contributed to Tesla’s dramatic recovery, cementing its resilience in the stock market:
1. Insider Confidence: Musk’s Stock Purchase
In mid-September, Elon Musk’s open-market purchase of $1 billion in Tesla stock signaled a strong vote of confidence in the company’s future. This move not only compressed investor skepticism but also generated a surge in market momentum, propelling Tesla shares upward.
2. Solid Q2 Performance
Tesla’s Q2 2025 earnings report provided more optimism, confirming the production of over 410,000 vehicles and deliveries totaling 384,000 units. Additionally, Tesla reported a record 9.6 GWh of energy storage deployment, showcasing robust growth in its energy business despite fluctuating EV demand. Key capacity and supply chain projects remain on track to support future expansion.
3. Advancements in Innovation
Throughout July and August, Tesla unveiled significant progress in its autonomous driving and robotaxi technology. Limited rollouts in cities like Austin and Las Vegas fed into the market’s enthusiasm for Tesla’s software and AI capabilities, solidifying its position as a leader in tech-driven mobility solutions.
The Market’s Perspective
Initially, the Musk-Trump feud was viewed as a substantial risk, with the market pricing in potential fallout from policy changes or contract disputes. However, three months later, Tesla’s stock trajectory tells a different tale. Investors appear to have shifted their focus toward the company’s execution of its goals and its AI-driven future, rather than political uncertainties.
As of September 16, Tesla shares closed at $421.62, a near multi-month high, comfortably above the post-fallout baseline. This rally represents a mix of improved fundamentals, successful product roadmaps, and Musk’s insider actions that reassured investors.
Looking Ahead
The question remains whether Tesla can maintain this momentum. Future developments in its Q3 and Q4 deliveries, milestones in Full Self-Driving (FSD) technology, and the impact of potential rate cuts on EV affordability will all play a critical role in sustaining investor confidence.
Explore Tesla’s Future
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