Tesla stock has spiked 20% since Musk said he's stepping back from DOGE
Mike Segar/REUTERS
- Tesla has surged 20% since CEO Elon Musk said he'd step back from DOGE.
- Musk's involvement with the Trump administration has been a headwind for the shares.
- The stock got a boost on Friday by looser rules pertaining to self-driving vehicles.
With Tesla CEO Elon Musk set to return to Tesla after spending the last three months with the Trump administration, the stock is kicking into high gear.
Shares of the electric vehicle maker have surged as much as 20% since Elon Musk announced plans to devote much more time to the company starting in May.
The news, shared during Tesla's first-quarter earnings call on Tuesday, amounted to an adrenaline shot for shareholders who have been annoyed by Musk's divided attention.
By late Friday, Tesla stock was trading as high as $286.85 per share, up 20% from Tuesday's closing price of $237.97.
Some analysts are keeping their fingers crossed that this could be the start of an enduring recovery. Since Trump's inauguration, the Tesla CEO has made waves as the unofficial head of the Department of Government Efficiency, a role which has politicized Tesla's brand among consumers.
Given DOGE's contentious work — including initiating sweeping federal layoffs — investors this year have grown worried about damage to the brand. They had their reasons: Tesla boycotts and protests grew in the first quarter, while weak deliveries and sales data in the US and abroad led to a dismal earnings report on Tuesday.
"It's going to be viewed historically as probably the most important conference call Musk has ever had," Wedbush Securities analyst Dan Ives said about the DOGE step-back announcement, speaking to Bloomberg TV. Though a long-time Tesla bull, Ives was a loud critic of Musk's political ambitions in the first quarter.
After getting a boost from Musk's DOGE departure, the stock saw a fresh catalyst for more gains on Friday.
The US Department of Transportation announced looser rules on autonomous vehicles, with self-driving cars used for testing to be exempt from certain safety procedures. The change was presented as a way to help keep American firms competitive against a growing Chinese rivalry.
"This Administration understands that we're in a race with China to out-innovate, and the stakes couldn't be higher," U.S. Secretary of Transportation Sean Duffy said in a statement. "As part of DOT's innovation agenda, our new framework will slash red tape and move us closer to a single national standard that spurs innovation and prioritizes safety."