Tesla Inc., the electric vehicle giant based in Texas, United States, saw its share price rebound by 7% on June 7, 2025, following a $152 billion selloff triggered by political tensions between CEO Elon Musk and former U.S. President Donald Trump. Despite the recovery, the stock remains down 20% year-to-date as uncertainty around policy and company contracts continues.
Tesla Inc., the Texas-based electric vehicle and clean energy company led by Elon Musk, saw its stock price rebound 7% after a dramatic $152 billion market cap loss triggered by a political clash between Musk and former U.S. President Donald Trump. The stock had dropped 14% on June 6 before recovering some ground the following day. However, shares remain down nearly 20% year-to-date.
The sharp decline came after Musk criticized Trump’s sweeping tax bill proposal, which includes phasing out the $7,500 electric vehicle tax credit by the end of 2025. The former president responded by suggesting possible cuts to federal contracts awarded to Musk’s companies, including SpaceX, which supplies rockets and launch services to NASA and the U.S. government.
Although a report by Politico indicated that a conversation between the two men was possible later in the day, a White House official clarified on June 7 that President Trump was not interested in reconciliation talks with Musk. Meanwhile, Musk appeared receptive to peace on social media platform X, engaging with users who called for a truce.
Tesla’s volatile stock movement added to Wall Street’s broader concerns, although it helped drive a late-week market rebound. The stock closed higher on June 7, helping all three major U.S. stock indexes log weekly gains.
Despite the temporary recovery, Tesla shares still trade at a lofty valuation—120 times expected earnings—raising questions about sustainability amid rising competition and political volatility. Tesla’s initial gains following Musk’s support of Trump’s 2024 presidential bid have been reversed due to brand image concerns, weaker EV sales, and broader market instability.
On the macroeconomic front, the U.S. Department of Labor reported that 139,000 jobs were added in May, keeping the unemployment rate at 4.2%. Wages grew faster than expected, boosting U.S. Treasury yields. The yield on the 10-year Treasury note rose to 4.47%, while the 30-year bond yield climbed to 4.93%.
Markets responded with optimism, with the Dow, Nasdaq, and S&P 500 all posting gains. Meanwhile, the dollar index rose 0.57% to 99.22, and crude oil prices hit their highest levels since April. Internationally, Japan’s Nikkei rose 0.50%, while Asian and emerging markets showed mixed performance.
While Tesla’s bounceback offered some relief, the ongoing uncertainty between Musk and Trump, along with policy unpredictability, casts a shadow over the company’s short-term outlook.
