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Investing.com - The political calculus around renewable technologies and electric vehicles has "shifted modestly" following a public falling-out between billionaire Elon Musk and U.S. President Donald Trump, analysts at Oppenheimer said in a note to clients.
A fight between Musk and Trump over a massive tax-and-spending bill devolved on Thursday into an online sparring match over who deserved credit for Trump’s election win, with the two later exchanging threats on their respective social media platforms.
In a note to clients, the Oppenheimer analysts said that, following the bust-up, Congressional leaders wary of the medium-term risks of the feud could extend renewables safe-harbor provisions in Trump’s so-called "big, beautiful bill".
Trump in particular suggested that he could cut off billions of dollars worth of subsidies to Musk’s businesses, sending shares in Tesla (NASDAQ:TSLA) -- which is helmed by Musk -- down by more than 14%. The sell-off wiped some $150 billion in market value off the stock, while Musk’s personal net worth plummeted by about $27 billion to $388 billion, according to Forbes data cited by Reuters.
In response, Musk wrote about possibly creating a new political party, hinted at Trump’s inclusion in government documents linked to late sexual offender and financier Jeffrey Epstein, and seemed to support an impeachment of the president.
Indications were emerging of a potential de-escalation in the feud on Friday, with the president telling Politico that the relationship is "okay" and "going very well, never done better".
Meanwhile, White House aides are planning for the two to hold a call in a bid to forge a detente in the spat, Politico reported.
"We see the potential for better than feared language in the Senate budget bill driving near-term upside for solar names," the Oppenheimer analysts said.
At the same time, they flagged that the "difficult work" is only just beginning for Tesla, as the electric vehicle manufacturer faces the task of contending with recent controversy around its leader’s political activities and an ongoing push to enhance its artificial intelligence capabilities.
"We continue to see challenges in Tesla’s autonomy platform given its reliance on photon counting cameras and expect investors to be less forgiving of product delays given Musk’s adjusted political standing," the analysts argued, adding that they have now trimmed their full-year sales and earnings estimates for the company.