(NEW YORK) — A feud between President Donald Trump and Tesla CEO Elon Musk hammered shares of the electric carmaker on Thursday, before a lull in the acrimony on Friday prompted a recovery of some losses.

Still, as of midday Friday, shares had dropped nearly 10%, wiping out tens of billions of dollars in company value.

The falling out between Trump and Musk raises serious concern for Tesla, threatening crucial regulatory approvals and government subsidies, while risking ire from conservative car buyers who may otherwise have eased sales woes suffered as liberals turned elsewhere, some industry analysts told ABC News.

The outcome remains unclear, however, leaving open the possibility the two sides may patch up the relationship or Tesla could navigate fraught ties with the White House, they added.

The feud “puts massive pressure on Tesla shares with fears that Trump will turn from friend to foe and create a tough regulatory environment for Musk in the Beltway,” Dan Ives, a managing director of equity research at the investment firm Wedbush and a longtime Tesla bull, said in a memo to clients on Friday.

The president and the world’s richest person volleyed tit-for-tat barbs on rival social media platforms Thursday in a public clash that Ives described as “one of the strangest Twilight Zone days we have seen.”

Tesla shares sank as much as 18% on Thursday, before closing down 14%. In early trading on Friday, Tesla climbed nearly 6% as tensions appeared to thaw.

Overall, the stock is down nearly a third from an all-time high in December, which resulted from a sharp rise after the election of Trump.

Tesla remains a top electric carmaker but the company faces growing competition, especially from Chinese firms such as BYD.

Tesla’s profits fell 71% over the first three months of this year, a company earnings release in April showed. The decline coincided with a sales slump at Tesla and came amid worldwide protests against Musk over his role in Trump’s administration.

As car sales slowed, Musk touted a future autonomous car service, dubbed robotaxis, as a growth area for the business. The company plans to roll out its robotaxi test program in Austin, Texas, later this month.

Trump could threaten those aspirations, however, if he pressures federal regulators to deny necessary approvals for the company’s autonomous driving program or renews investigations into the safety of the company’s full self-driving software, analysts said.

“If full self-driving were to be invalidated, that would be a huge hit to Tesla stock and to Musk,” Gordon Johnson, CEO and founder of data firm GLJ Research, who is bearish on Tesla, told ABC News.

Tesla also generates significant revenue from the sale of carbon emissions credits to other car manufacturers, which helps the firms comply with environmental standards set by a range of government entities.

Tesla earned nearly $2.8 billion last year on the collection of such government subsidies while incurring few costs in this area of its business, the firm said in its 2024 annual report.

In theory, Trump could seek to erode state-level emissions standards in a manner that alleviates much of the need for rival carmakers to purchase them. If California were to do away with its emissions credit system, it could cost Tesla roughly $2 billion, a JPMorgan report last month found.

“I can’t stress enough the risk of these credits going away,” Johnson said.

For now, the outcome of the fallout remains unknown and could prove minimal, some analysts told ABC News.

They pointed to the likelihood of at least partial reconciliation between Trump and Musk, who as recently as last week exchanged effusive praise in the Oval Office. All-out government attacks on Tesla would incite a prolonged, combative relationship, analysts said, which may not benefit either side.

The company still offers longstanding, affordable EV models and an extensive battery-charging network.

Observers who focus on the headlines and stock gyrations risk overstating Trump’s role in the fortunes of Tesla anyway, Seth Goldstein, an analyst at research firm Morningstar who studies the EV sector, told ABC News.

“While political fallout and potential retribution will move the stock, I don’t think this is as big an event as Tesla’s other events coming up this year,” Goldstein said, pointing to the robotaxi testing.

Ives, of Wedbush, voiced similar optimism about the possibility of moving past the feud.

“We believe cooler heads will prevail today and into the weekend,” Ives said. “Hopefully.”

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