Tesla stock surges more than 5% following Elon Musk’s suggestion of cooling off period with President Trump.

Elon Musk recently experienced a significant hit to his net worth as Tesla shares plummeted by 14%, causing a loss of £110.81 billion ($150 billion) in market value. This drop followed a very public dispute between Musk, the richest person in the world, and US President Donald Trump. The tension arose over disagreements about a tax bill, leading to mutual threats to cancel federal contracts and decommission the Dragon spacecraft, vital for SpaceX missions and cargo transport to the International Space Station. This clash resulted in a substantial financial hit to both Musk’s enterprises, with over £16.25 billion ($22 billion) in combined revenue from federal contracts over the last two decades.

The conflict between Musk and Trump escalated when the President specifically targeted Musk’s government subsidies and contracts as a potential source of budget cuts. This move was met with Musk’s dire warnings about America facing financial ruin and a coming recession if Trump’s tax changes were implemented. Additionally, the proposed legislation would eliminate a tax credit for Tesla buyers worth up to £5,540 ($7,500) by the end of 2025, impacting the company’s yearly profit by approximately £886.49 million ($1.2 billion). The bill would also accelerate the end of these tax credits by seven years.

Elon Musk publicly criticized Trump’s decisions, including the cessation of his Electric Vehicle Mandate and insinuations about his mental state. In response to Musk’s call for Trump’s impeachment and implications about Trump’s political connections, there seemed to be a shift in tone from Musk. He hinted at a possible de-escalation of tensions with Trump, leading to a 5.4% rise in Tesla’s stock in premarket trading as investors sensed a possible turning point in the feud.

Billionaire investor Bill Ackman weighed in, urging both parties to seek common ground for the greater good of the country. Musk seemed to agree with Ackman’s sentiments, indicating a willingness to defuse the situation. Reports suggest that White House aides are coordinating a call with Musk to address the escalating discord. In light of Musk’s recent stock market losses, which partly stemmed from uncertainty surrounding his role in the White House, there is growing speculation about his future political involvement and business priorities.

Amidst this conflict, Musk hinted at the formation of a new political party that seeks to occupy the middle ground and attract a broader base of support. This idea garnered support from figures like Mark Cuban, revealing potential alliances forming amid the tumult. Ultimately, the public altercation between these two influential figures may be a catalyst for change in both political and business landscapes, prompting discussions about cooperation and compromise in the interest of stability and progress.