Elon Musk's Tesla Comeback? Automaker's Stock Up by 20% After Ditching His Controversial DOGE Gig

Tesla stock is soaring following CEO Elon Musk's announcement that he will dedicate himself full-time to the electric car giant after a three-month stay in Washington.

The billionaire's return of attention to Tesla, announced on the company's Q1 earnings call, has triggered a wave of bullishness on Wall Street. It sent shares more than 20% higher to $286.85 by Friday, from Tuesday's close at $237.97.

This unexpected surge is more than just enthusiasm from investors. It's a strong expression of confidence after a difficult quarter marred by poor sales, disappointing delivery numbers, and mounting public criticism associated with Musk's political activism.

Elon Musk Ends Political Role to Reignite Tesla Focus

Elon Musk's Tesla Comeback? Automaker's Stock Up by 20% After

Musk's short but high-profile stint with the Trump administration as head of the Department of Government Efficiency (DOGE) generated both publicity and criticism. His position, which involved overseeing contentious federal layoffs, made Tesla a political lightning rod, generating boycotts and protests that further burdened the brand, according to Business Insider.

Now that Musk is distancing himself from Washington and doubling down on Tesla, the action is being greeted by investors and analysts as a turning point moment.

"It's going to be viewed historically as probably the most important conference call Musk has ever had," said Wedbush Securities analyst Dan Ives, who had earlier been critical of Musk's political distractions.

Regulatory Boost: Looser Rules Fuel Tesla's Momentum

Fanning the flames, the US Department of Transportation (DOT) released new, more liberal rules for self-driving cars on Friday. The new framework permits self-driving cars for testing purposes to skirt some safety measures, a move meant to enhance American innovation and competitiveness in the face of China's speedy development in autonomous technology.

According to US Transportation Secretary Sean Duffy, the government is aware of its competition with China. He recognized that the new framework would cut through red tape, leading to a national standard where innovation and safety are valued.

This news is a major victory for Tesla, which has been a long-time advocate of full self-driving technology. The new guidelines mark a more welcoming regulatory landscape for Tesla and other US automakers pioneering these advanced systems.

A Turning Point for Tesla?

Following months of Tesla exodus and brand harm, Tesla seems to be regaining its traction now. With Musk back full-time and newly minted support from Washington's regulatory branch, some analysts expect this to be the start of a broader rebound.

Though challenges remain, including competition from around the world, uncertainty about demand, and ongoing public attention, investors are apparently betting on a Tesla bounce.

If Elon Musk remains on track and follows through on innovation commitments, Tesla's turnaround tale could be just beginning.