Tesla shares experienced a rollercoaster ride Wednesday, initially dipping due to weaker-than-expected first-quarter vehicle deliveries, but later rebounding significantly following a Politico report. The report suggests that Elon Musk may soon be leaving his position as White House Senior Advisor, allowing him to refocus on his struggling electric vehicle company.
The news sent Tesla shares soaring, closing up 4% after earlier hitting session lows with a 6.4% drop. This surge comes amidst a challenging period for Tesla; the stock has fallen over 5% in the past month and more than 31% year-to-date, with a significant 36% drop in the first quarter alone — its worst performance since 2022. The uncertainty surrounding Musk’s White House role has undoubtedly contributed to investor anxiety.
Politico, citing Trump administration insiders, indicates that while President Trump appreciates Musk’s contributions, particularly the cost-cutting measures implemented, a decision was made for Musk to return to his business ventures. This leaves many wondering about the long-term impact of Musk’s White House involvement on Tesla’s performance.
Musk’s government role has sparked considerable controversy, triggering widespread protests, boycotts, and even violent attacks targeting Tesla stores and vehicles globally. Adding to the challenges, Trump’s automotive tariffs, impacting key Tesla suppliers in Mexico and China, further complicate the situation. Musk himself acknowledged the financial strain of his dual role, stating on Sunday at a rally that his White House position has been ‘a very expensive job’.
New York City Comptroller Brad Lander has even called for legal action against Tesla, alleging that the company misled investors by claiming Musk’s active management while he was heavily involved in White House initiatives. Lander’s office argues that Musk’s government work has actively harmed Tesla’s business interests.
The situation remains fluid, but the impact of Musk’s potential departure from the White House on Tesla’s stock price and overall performance is undeniable. Only time will tell if this marks a turning point for the struggling EV giant.
