Tesla’s board of directors was urged to put its foot down and rein in CEO Elon Musk after the electric car maker’s stock tanked following the mercurial mogul’s vow to launch a rival political party.
Wedbush Securities analyst Daniel Ives penned a bluntly worded note on Tuesday calling on the board to “act now” and establish formal boundaries around Musk’s political activities, warning that his increasing entanglement in Washington could threaten the company’s future.
Ives, a Tesla hawk who is known to be plugged in to the venture capital and IT communities, slammed Musk’s July 4 announcement that he will form the “American Party” after the billionaire’s public breakup with President Trump.
Calling the situation a “tipping point in the Tesla story,” Ives said the company “cannot have Musk spending more and more time creating a political party which will require countless time, energy, and political capital,” particularly with the autonomous and robotics sectors on the verge of transforming Tesla’s business.
Tesla shares plunged nearly 7%, to $293.54, on Monday — wiping out $68 billion in market cap.
The stock was flat in pre-market activity on Tuesday.
Ives laid out a three-point plan for the Tesla board to keep Musk at the helm through 2030. It includes:
- A new “incentive-driven pay package for Musk as CEO that increases his ownership of Tesla up to ~25% voting power” which would be drawn up by a special board committee
- Establishing clear guidelines for how much time Musk must devote to Tesla operations in order to receive his compensation.
- Creating a dedicated oversight committee to monitor Musk’s political activities to determine whether any of them interfere with his duties as CEO.
“We urge the Board to act now and move the Tesla story forward with Musk as CEO,” Ives wrote, reaffirming Wedbush’s belief that the stock will eventually excel.
“We view Tesla along with Nvidia as the two best physical AI companies in the world and Musk will play a major role in this success which we value the autonomous opportunity as $1 trillion alone to the Tesla story.”
The Post has sought comment from Tesla and Musk.
Musk’s cost-cutting role in the Trump administration as part of the Department of Government Efficiency (DOGE) led to widespread backlash against the world’s richest person and Tesla.
In May, the Wall Street Journal reported that Tesla’s board began searching for a successor to Musk, reaching out to executive search firms due to concerns over Musk’s focus on outside ventures and his involvement in the Trump administration.
The report said this effort started in April during a period of declining profits and stock value. The Journal also noted that the board urged Musk to commit more time to Tesla.
Both Musk and board chair Robyn Denholm denied the Journal report, calling it “absolutely false,” but the Journal stood by its reporting.
Musk parted with the administration in May. Shortly later, he ignited a war of words with Trump after criticizing his “One Big Beautiful Bill,” saying it would “add trillions to the federal deficit.”
Following Trump signing the spending bill on Friday, Musk vowed to launch the America Party, without providing any additional details.
“When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom.”
Trump called Musk “off the rails” and a “train wreck,” and dismissed the America Party as “disruptive and chaotic.”
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
