Tesla Investors Have a Message for Elon Musk: Stay Away From Politics

Elon Musk is diving headfirst back into politics, and Tesla investors are not happy about it.

The electric carmaker’s stock fell more than 7% on Monday as investors digested Musk’s renewed feud with President Donald Trump and his announcement that he would set up a new political party.

After polling users on his social media platform X, the billionaire unveiled “the America party” on Sunday, with Trump responding that Musk had “gone off the rails.”

It comes just months after the Tesla CEO told shareholders that he would be spending less time on politics and turning his full attention to the EV giant, which has had a difficult year so far.

Tesla’s sales have collapsed worldwide amid renewed EV competition and backlash over Musk’s work at DOGE, and the company is currently in the middle of a critical robotaxi launch in Austin.

For Tesla investors and analysts who have already witnessed the stock decline 22% this year, Musk wading back into the political fray is the last thing they want to see.

“We expect that investors are growing tired of the distraction at a point when the business needs Musk’s attention the most and only see downside from his dip back into politics,” wrote William Blair analysts Jed Dorsheimer and Mark Shooter in a note on Monday.

“We would prefer this effort to be channeled towards the robotaxi rollout at this critical juncture,” added the analysts. The investment firm downgraded Tesla to the equivalent of hold on the back of the expected negative impact of Trump’s “Big Beautiful Bill.”

Wedbush Securities analyst and Tesla Bull Dan Ives, who previously called on Musk to spend more time on Tesla while the billionaire was working on DOGE earlier this year, said that things had now “taken a turn for the worst” with Musk’s latest political move.

“Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” wrote Ives in a note on Sunday.

Monday’s share price fall reflects a wider trend in Tesla’s stock in recent months. Shares have tended to fall when Musk is more focused on politics, while rising when he has shown a public commitment to Tesla.

In the four weeks after Musk said he would step back from DOGE and focus on his EV firm in April, Tesla’s share price rose 40%.

In March, when Musk held a surprise livestream to discuss Tesla’s ongoing projects, shares jumped 13% in the following week’s trading.

‘What is this guy doing?’

Musk’s decision to form a new political party, which he has suggested will take on Republicans and Democrats and focus heavily on reducing government spending, also sparked renewed questions from some quarters about his future as Tesla’s CEO.

Former DOGE advisor James Fishbank announced on Sunday that his anti-DEI investment firm, Azoria, would postpone a planned Tesla ETF in response to Musk’s actions, which he criticized as a “ridiculous stunt.”

“I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO,” said Fishbank in a letter posted on X, which he said had been sent to Tesla board chair Robyn Denholm.

“I remain hopeful that Elon will return his full attention to Tesla. If not, I trust the Board will take appropriate action,” he added.

Tesla shareholder and frequent Musk critic Ross Gerber also weighed in on Monday, saying that “no one wants the Elon First party” and accusing Tesla’s board of failing to rein Musk in.

Gerber has previously called on Musk to step down as Tesla CEO, and told BI last week that the billionaire’s war of words with Trump was the “nail in the coffin” for the EV maker.

“You’re at this kind of point where it’s like, ‘What is this guy doing?’ You know? You’re supposed to be selling cars and robotaxis, and instead we’re fighting with the President of the United States,” Gerber previously told BI.

Tesla and Musk did not respond to a request for comment, sent outside normal working hours.

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