Tesla’s shares have finally clawed their way back into positive territory for the year after a turbulent 2025 that saw dizzying losses, political controversies, and dramatic reversals.
The company’s stock rallied as much as 8% on Monday, leaving Tesla with a 5% year-to-date gain and marking the first time since January that its performance turned green. The rebound caps an extraordinary roller-coaster year for Elon Musk’s automaker, which at its lowest point in April had plunged 45% year-to-date on a closing basis.
Timeline of Tesla’s 2025 Stock Swings, Per BI
Tesla’s volatility has been fueled by a mix of Musk’s personal decisions, U.S. politics, monetary policy shifts, and market sentiment.
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The latest catalyst for the surge has been Musk himself. The billionaire purchased 2.57 million Tesla shares — worth roughly $1 billion — according to an SEC filing, boosting his personal stake in the company to about 13%. Musk has openly declared he wants to raise his stake to 25%. Analysts at William Blair called the move “a strong signal of confidence in the most important part of Tesla’s future business, robotaxi,” noting that this was Musk’s first buyback of Tesla stock since 2020.
Investors have also been buoyed by expectations that the Federal Reserve is ready to resume interest rate cuts. At the Fed’s annual Jackson Hole symposium in August, Chair Jerome Powell signaled the central bank was poised to lower rates in September — a signal that risk assets, especially growth stocks like Tesla, immediately priced in. Tesla shares spiked 6% that day, outpacing the S&P 500’s 1.5% climb. Markets are now nearly certain that the Fed will trim its benchmark rate by 25 basis points this week.
The Musk-Trump Rift That Roiled Tesla
But the most destabilizing factor for Tesla this year was Musk’s dramatic falling-out with President Donald Trump, a rupture that wiped billions off Tesla’s market value in June.
Musk, who had been one of Trump’s most visible billionaire allies during the 2024 campaign — appearing at rallies, amplifying his message on social media, and publicly endorsing Republican economic policies — stunned investors when he began feuding with the president over his “Big Beautiful Bill.” The legislation led to the scrapping of the $7,500 federal EV tax credit, a move that reportedly didn’t augur well with Musk.
The fallout escalated quickly, with Trump threatening on Truth Social to cancel federal contracts tied to Musk’s companies. The dispute escalated into a bitter public spat, sending Tesla stock plunging 14% on June 5, the day the feud erupted.
The sell-off only began to ease when Musk publicly expressed regret over his combative remarks. On June 11, he softened his tone, saying he had gone “too far” in criticizing Trump. Tesla’s stock rebounded 6% through the end of that week, offering some relief to nervous investors.
Political Entanglements and Investor Anxiety
The episode underscored the broader anxiety surrounding Musk’s deepening entanglement with politics. His appointment as a “special government employee” at Trump’s Department of Government Efficiency earlier this year heightened fears that his focus was being spread too thin between government duties, Tesla, and his other ventures.
Those concerns proved justified. Tesla’s stock shed 37% from Trump’s January inauguration through the end of March, with another 9% decline in early April during a broader market downturn. The tide turned when Musk announced he would step back from his government role, allowing him to refocus on Tesla. By the end of April, the company’s shares had rebounded 9%.
Musk’s Fortune Rebounds
For Musk personally, the recovery in Tesla’s share price has restored much of the wealth he lost in the first half of the year. As of Monday’s market close, his net worth stood at $429 billion, according to the Bloomberg Billionaires Index, just shy of the $432 billion he held at the start of 2025.
Overall, Tesla’s rebound reflects both investor faith in Musk’s long-term vision — particularly the push toward robotaxis and AI-driven mobility — and the broader optimism tied to easier financial conditions if the Fed follows through on rate cuts.
Yet, the year has made clear how exposed Tesla remains to Musk’s political entanglements and how closely its stock price tracks not just its earnings or technology roadmap but also his relationships with powerful figures in Washington.
However, Musk’s billion-dollar show of confidence, paired with a likely friendlier interest-rate environment, has put Tesla back in the green, at least for now. But the shadow of his turbulent relationship with Trump lingers, suggesting that Tesla’s ride through 2025 may not yet be over.