Tesla Inc. (NASDAQ:TSLA) shares have experienced a 20% surge after CEO Elon Musk said he is stepping back from DOGE.
What Happened: Musk, who had been collaborating with the Trump administration for the past quarter, declared his intention to devote more time to Tesla during the company’s Q1 earnings call. This announcement served as a trigger for the stock’s rally, alleviating shareholders’ concerns about Musk’s divided attention.
By the end of the week, Tesla’s stock price had climbed to $286.85 per share, marking a 20% increase from Tuesday’s closing price of $237.97. Analysts are optimistic that this could indicate the beginning of a prolonged recovery for the electric vehicle giant.
Musk’s association with the Department of Government Efficiency, which involved initiating federal layoffs, had raised concerns about potential harm to Tesla’s brand. The first quarter of the year witnessed an uptick in Tesla boycotts and protests, coupled with weak sales and delivery data both domestically and internationally.
Also Read: Elon Musk: ‘Digging My Own Grave’ by Tying Himself to DOGE
“It’s going to be viewed historically as probably the most important conference call Musk has ever had,” stated Dan Ives, an analyst at Wedbush Securities, during an interview. Ives, a staunch Tesla advocate, had previously criticized Musk’s political aspirations.
On Friday, the US Department of Transportation announced relaxed rules on autonomous vehicles, providing an additional boost to Tesla’s stock.
The modifications, designed to maintain the competitiveness of American firms against escalating Chinese rivalry, exempt self-driving cars used for testing from certain safety procedures.
Why It Matters
Musk’s return to Tesla and his decision to shift focus from his political pursuits have evidently restored investor confidence, as reflected in the recent surge in Tesla’s stock price.
The relaxation of rules on autonomous vehicles by the US Department of Transportation further bolsters Tesla’s position in the market, potentially paving the way for increased testing and development of self-driving cars.
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Image: Shutterstock/Joshua Sukoff
