Elon Musk’s latest adventure into US politics is not going down well with investors, with the share price tumbling and even Tesla bulls urging the company’s board to intervene.
The comments came as Musk vowed to create a new political party, the America Party, after expressing his disgust at the passage and signing of Donald Trump’s “One big beautiful bill”, that is likely to blow out the company’s deficit by another $4 trillion, and slashes incentives for clean energy, and EVs.
“We believe this is a tipping point in the Tesla story and ultimately the Tesla Board needs to act now and set the ground rules for Musk going forward around his political ambitions and actions,” wrote Dan Ives, an analyst with Wedbush Securities, and one of the most vocal backers of the Tesla technology and company, and Musk himself.
The Tesla board was reported to have canvassed new CEOs earlier this year following the fallout caused by Musk’s support of Trump and his leadership of the administration’s ruthless cost-cutting, although it and Musk insisted the story was not true. Ives says Tesla has now reached a “tipping point”, and wants the board to “end the soap opera.”
“Tesla is heading into one of the most important stages of its growth cycle with the autonomous and robotics future now on the doorstep and cannot have Musk spending more and more time creating a political party, which will require countless time, energy, and political capital,” he wrote in a note that is reported widely in media.
On X, the social media platform owned by Musk, Ives posted a comment that proposed three actions that the board could take to provide guardrails on Musk’s political activities.
Musk responded with a simple: “Shut up, Dan” in between posting tweets complaining that the Trump administration had failed to release the Epstein files, which Musk alleges includes reference to Trump, and to Steve Bannon, the former Trump advisor who wants Musk to be deported.
Tesla shares, which had recovered some of this year’s losses after Musk stepped away from his role as head of Doge, have slumped sharply since he vowed to create a new political party if the Trump bill was passed and signed.
But analysts and US commentators note that Musk has now put both the left and the right wing of politics offside, and the company faces some other fundamental issues.
One of course is the declining sales, despite the release of the refreshed Model Y. Even in Australia, one of Tesla’s strongest markets and where the Model Y remains by far the best selling EV, its sales are still well below its peak in 2023 and 2024.
Globally, Tesla sales are still below last year, the company faces a significant loss of income from the cancellation of its EV credits, and there are reports of setbacks to the Optimus robot production.
There are also problems with the rollout of the “robotaxi” service in Texas, with reports of speeding and vehicles committing traffic violations, and X’s AI software Grok is now promoting Hitler memes on the social media platform
Fortune magazine noted that experts had long accused the Tesla board of being too cosy with Musk, given it includes his brother and several close friends.
It quoted Charles Enson, the founder of the Weinberg Centre for Corporate Governance, as saying there may not be a tipping point for the board, because it is too close to Musk.
“Over the years, Musk’s behaviour has become more outrageous,” Enson was quoted as saying. “the board’s lack of response makes you wonder: Who are these people, why are they there?”
Giles Parkinson is founder and editor of The Driven, and also edits and founded the Renew Economy and One Step Off The Grid web sites. He has been a journalist for nearly 40 years, is a former business and deputy editor of the Australian Financial Review, and owns a Tesla Model 3.