Tesla investors saw a glimmer of hope on Wednesday after reports suggested that Elon Musk could soon step down from his role in the Trump administration. The speculation fueled a 5% rebound in Tesla’s stock, which had earlier dropped as much as 6.4% due to disappointing first-quarter vehicle deliveries.
While the White House dismissed the report as “garbage,” it nevertheless sparked optimism among shareholders who believe Musk’s return to full-time leadership at Tesla could help the struggling electric vehicle maker regain its footing.
Musk’s White House Role Under Scrutiny
According to Politico, Musk and President Donald Trump have agreed that the billionaire will soon shift his focus back to his businesses, including Tesla. NBC News further reported that Musk’s government tenure might end after 130 days as a special employee. A senior official confirmed that Musk could leave within months, potentially reducing investor concerns about his divided attention.
Interestingly, in the digital asset space, the market is flashing mixed signals, and so is Dogecoin. At the time of this publication, the meme coin, which shares a name with Musk's outfit, had not changed much despite a nearly 10% decline in the past week. In a recent report by FinanceMagnates.com, Musk denied any connection between the two.
Musk’s involvement in the White House’s Department of Government Efficiency (DOGE) has been a contentious issue for Tesla shareholders. The CEO’s political engagement has led to widespread protests, boycotts, and even violent attacks on Tesla stores and vehicles globally. Moreover, Trump’s tariffs on key automotive suppliers in Mexico and China have added further strain to Tesla’s operations.
Tesla Shares Suffer Substantial Drop
Despite the recent uptick, Tesla’s stock remains under significant pressure. Shares have plunged over 30% year to date and suffered a staggering 36% decline in the first quarter, its worst quarterly performance since 2022, CNBC reported. Investor sentiment has been shaken by Musk’s external commitments, ongoing supply chain challenges, and weakening demand for Tesla’s vehicles.
Musk himself acknowledged the financial toll of his White House role during a rally in Green Bay, Wisconsin, on Sunday. Musk’s involvement in the White House has also drawn legal threats. New York City Comptroller Brad Lander has urged the city to sue Tesla on behalf of NYC pension funds.
