Tesla's three-day rally erases most of selloff from Musk-Trump feud

In a remarkable turnaround, Tesla's stock has rebounded significantly following a tumultuous week marked by a public dispute between Elon Musk and former President Donald Trump. After a staggering 14% drop in market value due to their heated exchanges, Tesla shares surged by 5.7% on Tuesday, closing at $326.09. This leaves the stock just $6 shy of its value prior to the controversy that erupted on social media. The recent increase in stock value followed Musk's posting of a video on X, showcasing Tesla's driverless vehicles undergoing tests in Austin, Texas. The eight-second clip featured a sleek Model Y SUV, adorned with a white graffiti-style "Robotaxi" logo, skillfully navigating an intersection while yielding to pedestrians in a crosswalk. This development marks a significant step for Tesla, which has faced delays in its autonomous driving ambitions, trailing behind competitors like Waymo in the robotaxi sector. Bloomberg previously reported that Tesla is gearing up to launch a pilot program for its driverless ride-hailing service in Austin, with an official start date anticipated around June 12. Although the company has yet to confirm specific details, Musk indicated that the initial rollout would be modest, featuring only 10 to 20 robotaxis equipped with the latest version of their Full Self-Driving (FSD) technology. These tests will focus on the Model Y rather than the futuristic CyberCab expected next year. Musk explained that the service would be "geofenced," restricting operations to specific areas, and that employees would monitor the fleet remotely. Notably, Tesla is currently classified as "testing" on Austin's official autonomous vehicle website, while Waymo is the only company listed under the "deployment" category. The video of the Model Y's autonomous operation was first shared by Sawyer Merritt, a notable Tesla enthusiast. Musk echoed the excitement on social media, asserting that every Tesla rolling off the production line is capable of unsupervised self-driving. This technological leap comes amid a backdrop of challenges for Musk, who recently found himself embroiled in a contentious feud with Trump, following the end of the latter's term as head of the Department of Government Efficiency. Their public spat escalated when Trump criticized Musk, claiming he had gone "CRAZY" and threatened to withdraw government contracts and subsidies. Despite the turmoil, the recent uptick in Tesla's stock may reflect a shift in sentiment, as Musk has since moderated his rhetoric towards Trump, even appearing to support the former president on certain policy issues. Investors have urged Musk to concentrate on revitalizing Tesla following a difficult first quarter, during which automotive revenues plummeted by 20% due to rising competition and backlash against Musk's political commentary. Analysts have noted that the sighting of Tesla's driverless cars in Austin is a key milestone in their investment thesis. However, some experts caution against overenthusiasm, emphasizing the need for more information on the safety and operational costs of these autonomous vehicles. Philip Koopman, an auto safety researcher, remarked that investors should remain cautious, as the testing phase does not guarantee safety or success. He anticipates that Tesla will rely on remote assistants to oversee the robotaxis, allowing for human intervention if necessary. As Tesla navigates these challenges, the spotlight remains firmly on its ambitious plans for autonomous driving.