Tesla Shares Get Boost as Musk's Role in DOGE Nears End Amid China's Main Rival's Fatal Crash
1min read Tesla shares rally as Musk hints he may step down from leadership in DOGE in May, while main competitor in China experienced a fatal car accident, potentially allowing tesla to regain market share.
The stock jumped nearly 2% in pre-market trading, even after posting a 36% decline in the first quarter.
Ask Aime: What is the potential impact of Elon Musk's hint of stepping down from DOGE leadership on Tesla's market share and stock performance?
During an interview with Fox News last Thursday, Elon Musk, the CEO of Tesla, stated that he believes he can achieve DOGE's goal of reducing $1 trillion in government spending within the time frame. Although Musk is regarded as a senior advisor to Trump, he is classified as a temporary government employee, with a 130-day cap on his services at the White House. Under that designation, his tenure would conclude at the end of May.
President Trump also hinted on Monday that Musk may have to return to run the company full-time, suggesting that DOGE's operations will eventually come to an end. However, the president mentioned he would keep him as long as I could.
Musk-led DOGE has aggressively laid off federal workers, and his close alliance with Trump has caused Tesla to face backlash, resulting in protests and a sales tumble in the U.S. and Europe. Musk has also admitted that his role in DOGE is negatively impacting Tesla shares in a significant way.
Additionally, it was noted that Tesla's biggest rival in China, Xiaomi, experienced a fatal accident involving a SU7 electric vehicle on March 29, resulting in three deaths while using smart driving software on the highway. Xiaomi is a strong competitor to Tesla, targeting a similar price market, and delivered over 29,000 cars in March, marking the sixth consecutive month with deliveries exceeding 20,000. The company plans to launch the SUV Yu7 model in mid-year.
Still, everything remains uncertain. Tesla is set to post Q1 delivery numbers on Wednesday, but many expect a year-over-year decline due to tumbling sales in the U.S. and Europe amid intensified competition in China.
