Tesla’s CEO, Elon Musk, just dropped a bombshell with his plan to launch a new political outfit, the America Party, and it’s already sparking fireworks with investors and analysts alike.
From stock plummets to public spats, Musk’s latest move has Tesla shareholders on edge, with Wedbush Securities analyst Dan Ives pushing for board intervention while Musk fires back with a blunt social media retort, Fox Business reported.
Over the weekend, Musk unveiled his intention to form the America Party, a decision that sent Tesla’s stock into a tailspin with a drop of over 5.6% in just five days, sliding from $312.70 to a low of $291.35 early this week.
This isn’t just a side project; it’s a market mover, with Tesla’s stock taking another hit of 1.1% on Wednesday, sitting at $295.88 with a 0.65% dip as the dust settles.
Year to date, Tesla’s shares are down a staggering 22%, weighed down by sluggish electric vehicle sales and backlash over Musk’s vocal support for President Donald Trump.
Enter Dan Ives, managing director at Wedbush Securities, who called this political detour a “tipping point” for Tesla, urging the board to step in and rein Musk’s focus back to the company.
Ives didn’t hold back, suggesting Tesla’s board update Musk’s pay package to secure 25% voting control and pave the way for a merger with xAI, Musk’s other venture.
He also proposed strict limits on Musk’s time at Tesla and board oversight of his political activities, arguing these are critical to protect shareholder interests.
But Musk wasn’t having it, snapping back on X with a terse “Shut up, Dan,” in a Wednesday morning post that left no room for misinterpretation.
Let’s rewind a bit—Musk’s political entanglements aren’t new, as his temporary role in the Trump administration, leading the Department of Government Efficiency (DOGE), stirred protests at Tesla dealerships and consumer boycotts over federal workforce cuts.
After his government stint ended in late May, Musk didn’t shy away from controversy, publicly criticizing the One Big Beautiful Bill Act, a tax and spending plan supported by Trump and congressional Republicans, over its impact on budget deficits.
He even threatened to fund primary challenges against the bill’s key backers, a move that fueled a public feud with Trump, though both later dialed back the tension before the America Party announcement.
Ives, in his investor note, warned that Musk’s political escapades are “exactly the opposite” of what Tesla shareholders need, especially with crucial autonomous vehicle regulations looming under the Trump administration.
That’s a fair point—while Musk’s bold ideas often redefine industries, this latest venture risks alienating the very investors who’ve banked on his focus to drive Tesla’s innovation, not political crusades.
Navigating this tightrope, Tesla’s board faces a dilemma: curb Musk’s extracurriculars without stifling the visionary spark that’s made him a titan, or let him run free and risk further market fallout. It’s a high-stakes game, and while Musk’s passion for shaking up the status quo is admirable, shareholders deserve a CEO whose eyes are on the road ahead, not on building a new political lane.
