Elon Musk and President Donald Trump have rekindled their friendship after a public falling-out last year, highlighted by a dinner at Trump's Mar-a-Lago estate and praise from the president aboard Air Force One. This renewed alliance could ease regulatory hurdles for Tesla's autonomous vehicle projects. Tesla shares showed mixed premarket reactions on January 5, 2026.
Elon Musk, CEO of Tesla, and President Donald Trump appeared to mend their relationship over the weekend of January 3-4, 2026, following a period of discord in 2025. Musk dined with Trump and first lady Melania Trump at the Mar-a-Lago estate in West Palm Beach, Florida, describing the evening as a "lovely dinner" in a post on X accompanied by a photo. Musk wrote that "2026 is going to be amazing," signaling optimism about the renewed ties.
The reconciliation built on a makeup in September 2025. On January 5, aboard Air Force One, Trump praised Musk during a press interaction, calling him "great" and adding, "He’s 80% super genius and 20% he makes mistakes, but he’s a good guy. He’s a well-meaning person." This followed reports of their dinner and comes after Musk stepped back from his role leading the Department of Government Efficiency (DOGE) in Trump's administration last year to focus on Tesla and SpaceX.
For Tesla, the alliance holds potential benefits amid ongoing National Highway Traffic Safety Administration probes into its Autopilot and Full Self-Driving systems. Trump's administration has pursued deregulation in autonomous vehicles, including a voluntary framework proposed in January 2025, relaxed crash reporting in April, and Federal Motor Vehicle Safety Standards updates in September led by Transportation Secretary Sean P. Duffy. These changes aim to reduce bureaucracy and foster innovation, potentially aiding Tesla's Robotaxi network rollout, though it currently navigates state-level approvals.
Broader policies, such as tariffs on foreign competitors like BYD, align with Trump's focus on domestic manufacturing and AI. However, outcomes depend on sustained cooperation. Tesla's 2025 challenges included a 7% drop in China shipments to 851,732 vehicles, ceding the top EV maker spot to BYD, despite a 3.6% December uptick.
Stock reactions were mixed: Tesla rose 1.5% in premarket trading per some reports, while others noted a 2.6% slide to $438.07, reflecting investor focus on autonomy and robotics amid earnings due January 28.
