Tesla shares jumped Wednesday as rumors spread that Elon Musk could soon leave his post at the Department of Government Efficiency. The potential move could shift Musk’s full attention back to Tesla.

The report, published by Politico, cited Trump insiders who said Musk and the president had agreed he would return to business soon. The White House later denied the claim, calling it “garbage.”

Tesla Stock Turns Green Despite Rough Start

Tesla’s stock flipped higher after the report surfaced. It gained nearly 5% during the day. Just hours earlier, shares had plunged more than 6% due to weak first-quarter vehicle deliveries.

Despite Wednesday’s rebound, Tesla stock is still down over 5% this past month. Since the start of 2025, the drop is steeper—more than 31%. The first quarter alone saw a 36% plunge, Tesla’s worst since 2022.

Investors have blamed multiple factors, including Musk’s political distractions, weakening EV demand, and tariffs impacting supply chains.

Musk’s White House Role Creates Backlash

Musk’s government position has caused chaos for Tesla’s brand. His alignment with Trump sparked global protests, boycotts, and even vandalism at Tesla stores. Critics say his political involvement hurt Tesla’s image and stock value.

Speaking at a rally in Green Bay, Wisconsin, on Sunday, Musk acknowledged the toll. “My Tesla stock and the stock of everyone who holds Tesla has gone, went roughly in half,” he said. “This is a very expensive job is what I’m saying.”

Musk Invested Big in Wisconsin Election

Musk wasn’t just talking politics. He poured millions into a state Supreme Court race, backing conservative judge Brad Schimel. The result didn’t go his way.

Democrat-backed Judge Susan Crawford won by a wide margin. Progressive groups openly attacked Musk’s influence, his DOGE cuts, and the impact of his involvement in the White House. On social media, Musk posted frequently about the race, turning it into a personal campaign.

City Officials Threaten Legal Action

Musk’s time away from Tesla may soon lead to legal trouble. New York City Comptroller Brad Lander wants to sue the company on behalf of NYC pension funds.

Lander’s office released a statement Tuesday. It accused Tesla of making “material misstatements” about Musk’s involvement in company operations. They claim Musk hasn’t been fully engaged at Tesla while running a controversial federal initiative under Trump.

The statement added, “Musk’s policies are actively harmful to Tesla’s business.”

Tesla Shares Rise, But Trouble Isn’t Over

The rally on Wednesday brought a sigh of relief to Tesla investors. Still, many remain uneasy. Musk’s political entanglements and Tesla’s declining delivery numbers continue to weigh heavily on the stock.

Whether Musk truly leaves the White House remains uncertain. Trump has praised Musk’s work in the DOGE program and may try to keep him around in some capacity.

For now, markets responded positively to the idea of Musk returning to Tesla full-time. But unless deliveries improve and political distractions fade, Tesla’s long-term recovery may remain stalled.