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Tesla (TSLA) investors have renewed hopes for their own “Liberation Day.”
Trump has told people close to him, including members of his Cabinet, that Elon Musk will be stepping back from his government role in the coming weeks, according to a market-shaking report from Politico, a move that has broad implications for Washington and Wall Street.
The White House press secretary called the report “garbage” on X, noting that both Musk and Trump have long said the former would depart when “his incredible work at DOGE is complete.”
Investors, however, appreciated the report’s clarification. Tesla stock, which had been down Wednesday 4.6% after news of poor deliveries, zoomed up 11% to close around 5% up as the market digested the story.
Even before Musk became Trump’s patron, attack dog, and agency wrecking ball, he stood accused by investors and analysts of being a distracted CEO. Prior to Musk dismantling federal agencies, he disemboweled Twitter and was a constant source of unprompted drama. All the while, even his most loyal backers pointed to a bumpy Tesla stock chart and implored him to “lock in.” He didn’t always listen.
But times have changed, and so has Tesla’s stock price. The EV maker has shed roughly one-third of its value this year, well below the market average and by far the worst performer of the Magnificent Seven.
Musk’s support for Trump on the campaign and during his first 100 days was rightly seen as a cozying up to power and, at first, a fast track for Tesla’s broader AI and autonomous ambitions. One way to ensure a more friendly regulatory environment is to make a friend out of the man in the White House. But Musk, through his polarizing political activity in the US and Europe, may have overplayed his hand.
He’s the richest person in the world. He’s not, however, invulnerable, and neither is Trump or the GOP. It’s more than a coincidence that the news of Musk paring back his duties arrived the day after a stinging political defeat in Wisconsin. A conservative judge whom Musk zealously backed lost his bid for a Supreme Court seat there by 10 points.
Through his work at DOGE, and what many people, including Republicans, saw as a cruel, cavalier approach to American workers and life-saving programs, Musk made new enemies. By involving himself so emphatically in another US election, the Tesla CEO made this latest race a referendum on him. And the people voted no. He’s become a villain to elected Democrats and a liability to Republicans.
