ISLAMABAD: Shares of Tesla surged more than 2% on Thursday following Elon Musk’s announcement that he is stepping back from his role in the Trump administration.
The move has sparked optimism among investors that the Tesla CEO will now redirect more attention toward the company’s core operations—especially its much-anticipated robotaxi launch.
Musk’s recent political affiliations, particularly his alignment with Donald Trump and right-wing groups in Europe, had created considerable backlash.
Critics argued that his political entanglements were damaging Tesla’s brand image, leading to protests and a slump in consumer confidence. This turbulence was compounded by Tesla’s declining sales trajectory, marking its first-ever annual drop in 2024 and now a likely repeat in 2025.
Investors Welcome Shift Toward Tesla Priorities
Investor sentiment quickly improved following Musk’s announcement. Analysts at Wedbush Securities labeled Musk’s Washington stint as a “code red situation,” suggesting it risked long-term demand for Tesla.
Dan Ives, a notable Tesla bull, commented, “Musk’s exit is music to the ears of Tesla shareholders… 2025 started off dark, but now those days are in the rear-view mirror.”
Musk recently acknowledged that his duties with the Department of Government Efficiency had been scaled back, reducing his involvement to just one or two days per week.
Moreover, he disclosed plans to significantly reduce his political spending, which included nearly $300 million spent backing Trump’s 2024 campaign and other Republican candidates.
Tesla shares were trading at $363 before the market opened, although they remain down 11% for the year.
Robotaxi Launch Gains Momentum Amid Leadership Refocus
Shortly after the news of his administrative exit, Musk took to social platform X to announce successful testing of fully autonomous Model Y vehicles in Austin, Texas. The rollout of the robotaxi—set to begin in June—is now seen as pivotal to Tesla’s future.
Tesla has recently deprioritized its affordable EV platform in favor of developing autonomous services and Optimus, its humanoid robot project.
This strategic pivot has raised both excitement and skepticism, as much of Tesla’s current valuation is built on the success of these innovations.
Despite mixed views on whether Musk’s political exit will tangibly change Tesla’s direction, analysts agree it has helped restore confidence among stakeholders.
As Morningstar analyst Seth Goldstein noted, “Musk’s departure from DOGE will improve market sentiment for Tesla, but I see no real change for Tesla.”
