The short-lived clash between CEO Elon Musk and President Donald Trump hurt Musk far more than it hurt Trump. Musk was already done serving as a special government employee, and with the election behind him, Trump doesn’t have as much to lose. Electric vehicle subsidies are critical for Tesla (TSLA), however, as are government contracts for Musk’s other companies.
Musk likely realized this, prompting him to delete his posts on X and say he went too far. Trump appears to have taken this in stride, saying he “wishes” Musk “the best.”
Wedbush analyst Dan Ives believes this drama actually benefits Tesla. The spat and the subsequent resolution swept the headlines, whereas the robotaxi delay from June 12 to June 22 largely went under the radar.
Why Wedbush Is Bullish on Tesla Now
Dan Ives believes “Musk needs Trump and Trump needs Musk.” It’s debatable if Trump actually “needs” Musk, but having him on board is more positive than negative.
“We believe the vast majority of valuation upside looking ahead for Tesla is centered around the success of its autonomous vision taking hold with this key launch in Austin ahead,” Ives said. He sees a $2 trillion valuation for TSLA due its full self-driving technology and robotaxi fleet.
He previously cut his price target for TSLA to $315 in April, but he quickly raised it back to $500 in late May.
As for Musk needing Trump, that’s certainly true. Robotaxis won’t be a national success without coordination from the government. Tesla needs a federal framework and many approvals before that happens. Even if the relationship between Musk and Trump is neutral, that bodes better for Tesla compared to a continued spat between the two.
Dan Ives’ views on Tesla have been bullish for a while, and he is yet to be proven wrong. Investors have increasingly focused on robotaxis and Optimus robots instead of the underperforming core automotive business. The Musk-Trump drama has also certainly helped TSLA stock in the sense that the robotaxi delay slipped past many.
Should You Turn Bullish on TSLA Stock Now?
TSLA stock is still down 12% from its May highs. One could argue in favor of more near-term bullish price action if the broader AI sector keeps surging and investors keep overlooking the core business.
However, the long-term prospects still hang in the balance. Tesla has repeatedly pushed back deadlines for robotaxis and Optimus robots. In 2019, Musk was “very confident” about a million robotaxis on the road in 2020. He was also “extremely confident” about Level 5 FSD in 2020.
His most recent comments are that “Tentatively, [Robotaxi will launch] June 22. We are being super paranoid about safety, so the date could shift. First Tesla that drives itself from factory end of line all the way to a customer house is June 28.” This is just a few days away, and appears more likely than ever to occur.
At the same time, sustaining all that bullishness for the long run will be precarious if Tesla can’t stabilize the core business and prove it can scale up the robotaxi business profitably. TSLA stock currently trades at 175.84 times trailing earnings and has a $292 mean price target, implying 9% downside.
