Tesla drops as Musk heads “exactly the opposite direction” from what investors want

Wedbush Securities analyst Dan Ives is not celebrating Elon Musk’s “America Party,” saying the move is a distraction from his job as CEO of Tesla, having recently returned to his work at the EV maker after his stint at DOGE.

“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,” Ives wrote.

Musk’s escalation of his feud with President Trump could create more government roadblocks for the EV company as it tries to transition into an autonomous vehicle outfit, hurting the stock, the Tesla bull said.

“Tesla shares will likely be under some pressure tomorrow as investors worry about the implications if Trump and Republican party view Musk more as a foe than a friend now. With the autonomous future ahead and the AI Revolution in full force Musk/Tesla do not need to keep poking the bear as Trump can create more hurdles for Musk/Tesla/SpaceX over the coming years if this political battle gets nastier heading into mid-terms in 2026. Tesla needs Musk as CEO and its biggest asset and not heading down the political route yet again... while at the same time getting on Trump’s bad side.”

Trump responded Sunday to Musk’s proposed political group by saying third parties have “never succeeded” and calling Musk a “TRAIN WRECK.” He also criticized Musk’s choice of Jared Isaacman for NASA leadership as “inappropriate,” given their friendship, Musk’s conflicting interests as head of SpaceX, and Isaacman’s political donations to Democrats.

The stock was down as much as 7% in early trading on Monday. Ives maintained his firm’s “outperform” rating and $500 price target nonetheless.