Tesla Stock Jumps on Reports Elon Musk May Step Down from Controversial Government Role
Tesla shares surged over 5% on Wednesday following a Politico report that Elon Musk is preparing to step down from his polarizing role within the Trump administration’s Department of Government Efficiency (DOGE). The rally reflected renewed investor optimism that Musk may soon return his full attention to Tesla — a move seen as critical to safeguarding the company’s estimated $43 billion brand value and reviving confidence in its future.
While the White House dismissed the report as “garbage,” and Musk himself labeled it “fake news” in a post on X (formerly Twitter), Wall Street reacted decisively. After an early-session dip of 6.4% triggered by a disappointing Q1 delivery report, Tesla stock rebounded sharply to close more than 5% higher, fueled by the possibility of Musk stepping away from politics.
According to Politico, Musk and Trump had recently agreed that the billionaire CEO would exit his temporary federal role and return to his business ventures. NBC News later added that Musk’s departure would likely come at the end of his 130-day term as a special federal employee.
The news comes as a welcome reprieve for Tesla investors. The company’s stock has fallen over 31% year-to-date and tumbled 36% in Q1 alone — its steepest quarterly loss since 2022. Many attribute the slump to concerns over Musk’s divided focus, with critics arguing that his government involvement has undermined Tesla’s performance.
Since assuming his position at DOGE earlier this year, Musk has become a central figure in Trump’s cost-cutting agenda — one that some believe runs counter to Tesla’s clean energy mission. His high-profile political activity has also drawn public backlash. Tesla showrooms and Supercharger stations have been vandalized in multiple countries, and online boycott campaigns have proliferated.
Shareholders, too, have voiced their unease. Speaking at a Republican rally in Wisconsin last Sunday, Musk himself acknowledged the financial toll of his political role:
“My Tesla stock — and the stock of everyone who holds Tesla — has gone roughly in half,” he told the crowd. “This is a very expensive job, is what I’m saying.”
This rare public admission underscored the cost of Musk’s detour from corporate leadership. Tesla’s $43 billion brand value — long built on innovation, clean technology, and Musk’s personal vision — has eroded under political scrutiny.
“Tesla used to be synonymous with the future,” said Linda Carey, senior automotive brand strategist at Vireo Partners. “Now it’s caught in the political crossfire, and that’s damaging the brand Elon spent over a decade creating.”
Investors appear to agree. Wednesday’s rally signaled that many believe a renewed, full-time commitment from Musk could help steady Tesla’s trajectory and restore its credibility.
However, Musk’s political entanglement may carry legal consequences. On Tuesday, New York City Comptroller Brad Lander urged the city to consider legal action on behalf of public pension funds, citing misleading disclosures about Musk’s involvement with Tesla while serving in the federal government.
“Tesla has portrayed Musk as fully engaged in company operations,” Lander’s office stated, “despite his commitments elsewhere — including promoting policies potentially harmful to Tesla itself.”
Legal experts note that such claims could expose Tesla to liability over potential governance and disclosure violations. “Boards must ensure accurate reporting to shareholders,” said NYU corporate law professor Jill Hanford. “If Musk’s role has been misrepresented, that could be grounds for serious legal scrutiny.”
Even if Musk does step down from DOGE, the challenge ahead is considerable. The EV sector faces headwinds — from higher interest rates and reduced subsidies to growing competition from both legacy automakers and Chinese EV giants like BYD.
Tesla’s recent price cuts have squeezed profit margins without meaningfully boosting sales. Meanwhile, delays in high-profile projects like the Cybertruck and inconsistent messaging around Full Self-Driving technology have raised concerns about long-term strategy.
Still, analysts remain cautiously optimistic about Musk’s ability to turn the tide — if he refocuses. “Elon Musk is still Tesla’s greatest asset — and potentially its biggest liability,” said Carey. “If he steps away from politics and brings his full energy back to innovation, he can still reclaim Tesla’s position as a tech and energy leader.”
Wednesday’s market reaction suggests investors are ready to believe in that possibility. But hope must be followed by action.
“There’s a window here for Musk to right the ship,” said Marcus Tanaka, analyst at Greenline Research. “The brand is bruised but not broken. If he steps away from DOGE, refocuses Tesla’s mission, and starts executing again, there’s still time to recover what’s been lost.”
For now, the market has spoken. Whether Musk officially exits DOGE or not, investors are signaling a clear desire: they want Musk back — not just in title, but fully focused and at the helm.
In a move that fuses populist transparency with a flair for showmanship, tech mogul Elon Musk has sparked a national conversation that extends well beyond […]
