Tesla shares are nearly back to pre-crisis levels after suffering a sharp drop last week following Elon Musk’s highly public spat with President Donald Trump.
The stock surged 5.7% on Tuesday to close at $326.09, putting it just about $6 short of its price before Musk and Trump’s social media clash sent the company’s market cap spiraling by 14% in a single session.
The recovery is being interpreted by investors as a turning point, not just for Tesla’s stock, but for Elon Musk’s public priorities.
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Robotaxi Sparks Rally—But It’s About More Than Cars
The latest rally followed the release of an eight-second video showing a Tesla Model Y operating autonomously on the streets of Austin, Texas, without a safety driver. The vehicle, painted black and bearing a graffiti-style “Robotaxi” logo, was seen navigating an intersection, slowing for pedestrians at a crosswalk. Tesla fans hailed it as a long-awaited public appearance of the company’s Full Self-Driving (FSD) software operating in “unsupervised” mode.
Musk amplified the clip on X, calling it a “beautifully simple design” and emphasizing that these were regular, unmodified Teslas, meaning future robotaxis are already rolling off the production line. A pilot ride-hailing program using about 10 to 20 Model Y vehicles is expected to launch in Austin on June 12, though Tesla has not formally confirmed the date. For now, the cars will operate within a geofenced zone and be remotely monitored by employees who can intervene if needed.
Despite the excitement, analysts and researchers have warned against reading too much into the short clip. Philip Koopman, an autonomous vehicle safety researcher at Carnegie Mellon, told CNBC the video doesn’t offer enough information to evaluate how safe or effective the system really is.
Even so, the market appears encouraged—not just by the robotaxi test, but by what the test signals: a Musk who’s refocusing on Tesla after months of political entanglements and public controversies.
Exit from DOGE Marks a Turning Point
Tesla’s rebound coincides with Musk stepping down from his high-profile, though informal, role as head of the Department of Government Efficiency (DOGE) under the Trump administration. Though the post was largely symbolic, it positioned Musk at the intersection of policy, tech, and power—and increasingly distracted him from his core ventures.
Since exiting DOGE, Musk has become more publicly engaged in Tesla’s operations and vision, starting with renewed pushes on autonomy and streamlining the company’s AI development pipeline. Analysts say the stock’s recent uptick may be the market pricing in the benefits of Musk returning to business leadership, where his strategic instincts have typically shone.
His recent fallout with Trump makes a return to politics even less likely in the near term. The two men, once aligned on regulatory rollbacks and space policy, began trading insults last week following disagreements over a new spending bill. Trump threatened to end federal contracts and subsidies for Musk’s companies, including Tesla and SpaceX. Musk, in turn, said SpaceX will ‘immediately decommission’ its Dragon capsule with NASA.
For investors, that’s welcome news.
“The more time Musk spends engineering and shipping products, the better it is for Tesla,” one analyst at a major investment firm told CNBC. “The political distractions were hurting the brand and the stock.”
Pressure to Refocus—and Perform
Tesla’s first quarter was a rough one. Automotive revenue fell 20%, as Chinese competitors like BYD and XPeng undercut Tesla on price, and Musk’s personal brand began to erode consumer enthusiasm in key markets like Germany and mainland China. Tesla also faced pushback in Europe, where sales slid in the early months of the second quarter.
Even before the Trump-Musk feud, investors were already pressuring the CEO to concentrate on product rollouts, not political posturing. The robotaxi reveal, along with the apparent dialing down of his political engagements, seems to signal that Musk is listening—at least for now.
Tesla is currently listed as “testing” on the City of Austin’s official autonomous vehicle registry, joining companies like Amazon’s Zoox and AVRide. Only Waymo, a subsidiary of Alphabet, holds a “deployment” designation, underscoring how far Tesla still has to go in commercializing autonomous mobility.
However, for bulls like Piper Sandler, that process has now officially begun. “A key component of our TSLA thesis has officially begun playing out,” the firm wrote in a Tuesday note, reaffirming its “buy” rating.
While Musk’s political estrangement may have opened a clearer path for Tesla to recover both public trust and investor confidence, the company still needs to navigate safety concerns and roll out a viable robotaxi service.
The big question now is whether Musk stays the course.
With Trump clearly drawing battle lines, and DOGE no longer occupying his calendar, all signs point to a Musk who is—for the first time in months—all in on Tesla. And the market, at least for now, appears to be rewarding that.