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 Muskโs 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 โgarbage.โ
Tesla Stock Turns Green Despite Rough Start
Teslaโs 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 Wednesdayโs rebound, Tesla stock is still down over 5% this past month. Since the start of 2025, the drop is steeperโmore than 31%. The first quarter alone saw a 36% plunge, Teslaโs worst since 2022.
Investors have blamed multiple factors, including Muskโs political distractions, weakening EV demand, and tariffs impacting supply chains.
Muskโs White House Role Creates Backlash
Muskโs government position has caused chaos for Teslaโs brand. His alignment with Trump sparked global protests, boycotts, and even vandalism at Tesla stores. Critics say his political involvement hurt Teslaโs image and stock value.
Speaking at a rally in Green Bay, Wisconsin, on Sunday, Musk acknowledged the toll. โMy Tesla stock and the stock of everyone who holds Tesla has gone, went roughly in half,โ he said. โThis is a very expensive job is what Iโm saying.โ
Musk Invested Big in Wisconsin Election
Musk wasnโt just talking politics. He poured millions into a state Supreme Court race, backing conservative judge Brad Schimel. The result didnโt go his way.
Democrat-backed Judge Susan Crawford won by a wide margin. Progressive groups openly attacked Muskโs 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
Muskโs 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.
Landerโs office released a statement Tuesday. It accused Tesla of making โmaterial misstatementsโ about Muskโs involvement in company operations. They claim Musk hasnโt been fully engaged at Tesla while running a controversial federal initiative under Trump.
The statement added, โMuskโs policies are actively harmful to Teslaโs business.โ
Tesla Shares Rise, But Trouble Isnโt Over
The rally on Wednesday brought a sigh of relief to Tesla investors. Still, many remain uneasy. Muskโs political entanglements and Teslaโs declining delivery numbers continue to weigh heavily on the stock.
Whether Musk truly leaves the White House remains uncertain. Trump has praised Muskโs 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, Teslaโs long-term recovery may remain stalled.