Elon Musk twist nobody saw coming as Tesla shares soar
A day after delivering a Tesla earnings report some described as the worst in the company’s history, Elon Musk had reason to smile again.
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Profits have been slashed, sales are down, protests against CEO Elon Musk continue across the world - and Tesla’s share price is going … up?
Beleaguered billionaire Musk was offered a moment of respite overnight as Tesla stock jumped more than five per cent a day after he delivered what some described as the worst quarterly earnings report in the company’s history.
Yes, Mr Musk’s net worth again soared by billions despite many predicting - and perhaps hoping - his controversial role in Donald Trump’s administration was having an irreversible impact on his most cherished company.
Most instant analysis of the stock movement linked it to Mr Musk’s revelation on an earnings call he is set to wind back his commitments in Washington.
That would suggest investors see Mr Musk becoming more hands-on with the electric vehicle manufacturer as a good thing. But it’s possible his statement had nothing to do with what happened on Wall Street.
A relief rally swept global equity markets as comments by US President Trump that he had “no intention” of firing the head of the Federal Reserve and his signals of possible tariff cuts for China reassured investors.
Global markets, already up-ended by President Trump’s trade war, were hit at the start of the week by fears he was looking to remove central bank boss Jerome Powell for not cutting interest rates, with the US president calling him a “major loser” and “Mr. Too Late”.
Experts warned such a move would deal a blow to the Fed’s independence and spark a crisis of confidence in the world’s top economy.
However, President Trump tempered those fears on Tuesday. “I have no intention of firing him,” he said.
Further comments by President Trump indicating a more conciliatory approach to the trade war with China added to the positive market sentiment.
“These comments have given markets a sense of optimism that recent chaos might have peaked and we’re heading towards calmer waters,” said AJ Bell investment director, Russ Mould.
Wall Street’s main equity indices, which had already gained more than two per cent on Tuesday, rose again. The broadbased S&P 500 finished 1.7 per cent higher.
Markets are climbing on “any headline that’s less negative on trade,” said Art Hogan of B. Riley Wealth Management.
Whether this is a one-day blip or a sign of a more promising future for Tesla investors remains to be seen.
The stock is down 34 per cent since January 1, but longer-term investors can find comfort in the knowledge it is still up 73 per cent in the past 12 months - and 419 per cent over the past five years.
Despite increased competition and the uncertainty created by President Trump’s tariffs, Tesla had its believers in a buzz on Thursday after revealing it had begun supervised full-self driving trips in Austin and San Francisco.
The company has already completed 1500 trips of a ride-hailing service where drivers are present to supervise and only intervene if necessary.
But it’s clear Mr Musk has more work to do to revive Tesla - and he’ll have more time amid plans to scale back his work with the Department of Government Efficiency.
From ‘Nazi’ salute to chainsaw stunt - Musk has wowed Washington
While classified as a mere “special government employee” and “senior adviser to the president,” the South African-born tycoon has left indelible marks on American politics as President Trump’s most visible billionaire backer.
Being President Trump’s right-hand man took on a new meaning when the world’s richest person made headlines by dramatically throwing out his arm - twice - at a rally celebrating Trump’s January 20 inauguration.
Standing at a podium bearing the presidential seal, Mr Musk’s right arm was straight, his hand open, his palm facing down. Historians agreed with Democratic politicians that the sharp gesture looked exactly like a Nazi salute.
The Tesla boss - whose electric vehicles were soon dubbed “swasticars” by critics - dismissed the claims, posting on his X social media platform: “The ‘everyone is Hitler’ attack is sooo tired.”
Whatever the display meant, Nazi-related jokes and memes dominated public reactions to the day meant to mark Trump’s triumphant return to office.
Hot off his salute shock, Musk participated virtually at a January rally for Germany’s anti-immigration, ultranationalist AfD party.
Mr Musk told the crowd “you really are the best hope” for Germany and urged them to be “proud of German culture and German values”.
His endorsement of the AfD shook mainstream German parties, which said they viewed it as foreign interference by Trump’s adviser. Vandals burned four Teslas in the streets of Berlin afterwards.
Despite record gains at the polls, AfD ultimately took second place in the election behind Germany’s conservatives.
Dressed down in MAGA hats and T-shirts, Musk became a near constant presence in the White House. For a while, so did his four-year-old son named X.
During Mr Musk’s first appearance before press since his arrival in Washington to run DOGE, the child was trotted out and President Trump said, “This is X and he’s a great guy.” The boy was filmed picking his nose while his father boasted about his cost-cutting exploits standing next to the Oval Office’s Resolute Desk.
Unelected and unconfirmed by Senate, Mr Musk has repeatedly bashed the “unelected, fourth unconstitutional branch of government, which is the bureaucracy” and immediately made brutal cuts to the federal workforce and budget.
To illustrate his management style, Mr Musk donned sunglasses and brandished a chainsaw on stage at a conservative get-together in Washington.
It was handed to him - not turned on - by right-wing Argentine President Javier Milei, who made the machine a symbol of slashing bureaucracy and state spending in his own country.
At Trump’s first cabinet meeting on February 26, Musk had a starring role even though he is not part of the cabinet. He stood looming near a doorway, wearing a T-shirt with words “Tech Support” across the chest as the cabinet met.
Even without a literal seat at the table, the country’s most powerful officials were overshadowed by Musk, who helped bankroll Trump’s 2024 presidential campaign.
Trump downplayed this tension shortly before the meeting, posting on his social media platform: “ALL CABINET MEMBERS ARE EXTREMELY HAPPY WITH ELON.”
With Musk’s Tesla car company taking a battering on the stock market and sales dropping sharply, and with vandals targeting his brand, the White House hosted a highly publicised test drive to boost Tesla’s rep.
With a Tesla Cybertruck and a Model S parked on the South Portico, President Trump and Mr Musk mounted a sale’s pitch.
President Trump even said he had purchased one.
The stunt didn’t ultimately turn around Tesla’s plummeting sales, with the electric vehicle maker reporting a 71 per cent drop in first-quarter profits.
Money can’t buy you everything, Musk discovered, after pouring $25 million into the most expensive court race in US history to try to get a pro-Trump Republican judge elected to Wisconsin’s Supreme Court.
Musk paid voters $100 to sign a petition opposing “activist judges” and even handed out $1 million checks to voters, beseeching the public to select the conservative judge.
The court’s docket was packed with precedent-setting cases over abortion and reproductive rights, the strength of public sector unions, voting rules and congressional district boundaries.
The US state in April instead chose a liberal judge by a wide margin, dismaying the billionaire - who had spent roughly $277 million in 2024 in the national race to help get Trump elected.
After Trump announced his sweeping US tariffs, deeply affecting major trading partners China and the European Union, Musk made the case for a free-trade zone between the US and Europe.
This clashes with Trump trade policy.
Shortly after, he called Trump’s economic adviser Peter Navarro, a longtime advocate for trade barriers, “dumber than a sack of bricks”.
Navarro had taken aim at Tesla, saying the carmaker mostly sourced assembled major components from factories in Asia.
Musk retorted with studies he said showed “Tesla has the most American-made cars”.
White House spokeswoman Karoline Leavitt later tried to play down the public feud, saying that “boys will be boys”.
- with AFP
Originally published as Elon Musk twist nobody saw coming as Tesla shares soar
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