Tesla, Inc.’s TSLA Elon Musk and JPMorgan Chase & Co.’s JPM Jamie Dimon, two of the world’s most influential CEOs, may have ended a nearly decade-long bitter feud and are pushing toward a more cordial relationship, Wall Street Journal reported on Sunday.
What Happened: Musk and Dimon have been striving for a brand new start since March, when the former attended the inaugural JPMorgan technology conference and shared the dais with the latter, the report said. Musk’s businesses, including Tesla and SpaceX, ceased their dealings with JPMorgan after a fallout in 2016. Additionally, the Dimon-led bank did not pursue any of Musk’s ventures, it added.
In 2016, Musk reportedly sought JPMorgan to underwrite leases for Tesla’s electric vehicles, but the bank’s executives dithered as they were unsure of how to value the life of the car batteries. This infuriated Musk, who promptly called the bank’s head of consumer banking and threatened to pull Tesla’s business. Dimon stepped in and made it clear to Musk that JPMorgan wouldn’t be bullied, the report said.
Following the March event, Dimon decided the bank could try to resume doing business with Musk, the report said, citing its source.
With the positive development in March, the road is clear for the two companies to start working together, the Journal said, citing people familiar with the relationship.
The report also noted that in May, JPMorgan hired Los Angeles-based wealth manager Eric Gray, who advises the ultra-wealthy, including Musk.
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The Pushback: An ongoing legal battle between JPMorgan and Tesla could hinder the return of a cordial relationship, the report said. In 2021, JPMorgan filed a lawsuit seeking over $162 million from Tesla for a series of trades.
The bank asserts that Tesla owes money for a trade it facilitated in 2014. Tesla, however, argues that the lawsuit is a retaliatory move because the bank is no longer receiving business from Musk.
Testifying in court in January 2023, Musk reportedly said, “In the case of JPMorgan, Tesla, um, has a very negative relationship with JPMorgan."
Why It’s Important: For JPMorgan, repairing its relationship with Musk is crucial. He is a potential client for the firm’s wealth management business, and his multiple ventures could generate business through banking, fundraising and deal-making services.
The report noted that an association with Musk could also present a set of challenges. It highlighted the difficulties faced by financiers of Musk’s Twitter acquisition, whose loans have significantly declined in value.
“But most bankers are eager to stay on his good side for fees from his transactions and potential initial public offerings, such as his rocket company, SpaceX,” the report said.
A reconciliation between Musk and Dimon is a win-win proposition, the report said, as Musk and his companies stand to gain access to the bank with the deepest pockets and a wider network of advisers and services.
According to the report, JPMorgan has never held the position of Tesla’s primary adviser; instead, that role has been traditionally filled by its peers Goldman Sachs Group, Inc. GS and Morgan Stanley MS.
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