Why Tesla Remains a Buy Despite the Musk-Trump Conflict

The public feud between Elon Musk and Donald Trump has sent Tesla's stock on a rollercoaster ride in June 2025, with shares plunging 14% in a single day as tensions peaked. While the spectacle dominates headlines, investors would be wise to look beyond the noise. Tesla's fundamentals—bolstered by its autonomous driving ambitions, market dominance, and the inevitability of a Musk-Trump détente—suggest this is a prime opportunity to buy the dip.

Autonomous Driving: A Game-Changing Moat

Tesla's Full Self-Driving (FSD) V14, set for a U.S. launch this quarter, represents a critical technological leap. The system leverages auto-regressive transformers—a neural network architecture that predicts future scenarios by analyzing sequential data—to enhance decision-making. With 7.7 million miles of daily driving data from its global fleet, Tesla's AI advantage is unmatched. By late 2026, Musk envisions millions of autonomous Teslas dominating roads, generating recurring revenue through its robotaxi service.

While skeptics cite regulatory hurdles and technical challenges (e.g., a 500-mile disengagement rate), the FSD rollout is already underway in Texas. By year-end, Tesla aims to expand its unsupervised driving service to “many U.S. cities,” a bold step toward monetizing its software prowess.

Market Dominance: Not Yet Ceded

Despite rising competition from Chinese rivals like BYD and European automakers, Tesla retains structural advantages. Its $30,000–$40,000 Model 3/Y variants, slated for 2025 launch, aim to undercut competitors while maintaining margins. Meanwhile, Tesla's energy division—projected to grow 50% annually—is a stealthy growth engine.

Critics highlight Tesla's declining Chinese sales (down 6% YoY in April) and regulatory headwinds, but these are temporary. The company's brand equity and first-mover advantage in autonomy remain formidable.

Short Sellers Are Overreacting

Tesla's stock has surged 58% since early 2025, reaching $362.73 despite the Musk-Trump feud—a testament to investor faith in its long-term vision. Short sellers, however, are betting big: 21.16% of shares are sold short, implying skepticism about execution risks. Yet this pessimism ignores Tesla's financial resilience.

While the RSI of 71.4 signals overbought conditions, Tesla's forward P/E of 192.63 reflects a premium for its tech ambitions. The dip caused by the Musk-Trump clash is a buying opportunity for those focused on Tesla's 2030 vision.

Musk-Trump Reconciliation: A Matter of Mutual Interest

The feud, rooted in clashing fiscal priorities, is unlikely to endure. Trump needs Musk's influence to pass the “Big, Beautiful Bill,” while Musk requires government contracts (e.g., NASA's SpaceX reliance) to avoid financial strain.

Behind the public sparring, both men have incentives to reconcile. Musk's calls for impeachment and Epstein allegations are tactical, not existential. A mediated truce—brokered by Republican lawmakers fearing legislative gridlock—is all but inevitable.

Investment Thesis: Buy the Dip, Hold the Vision

Tesla's current dip, driven by short-term political theater, masks its enduring strengths. The FSD rollout, energy division growth, and affordability strategy position Tesla to dominate the $12 trillion mobility market by 2040.

Actionable advice:
- Buy on dips below $350/share, using the Musk-Trump feud as a catalyst to accumulate shares.
- Hedging: Consider options or inverse ETFs to mitigate near-term volatility, but remain long-term bullish.

The Musk-Trump conflict is a storm, not a tsunami. For investors with a 5–10 year horizon, Tesla's fundamentals justify its premium—and the current chaos is a gift.

Disclaimer: This analysis is for informational purposes. Always conduct due diligence and consult a financial advisor before making investment decisions.