Tesla investors reportedly aren’t thrilled about CEO Elon Musk’s plans to launch a political party.
According to The Washington Post, longtime Tesla shareholders are urging the company’s board to rein in Musk and refocus him on the electric vehicle business—something he promised to do back in April after stepping down from his role with the so-called Department of Government Efficiency.
But that commitment hasn’t lasted. Since leaving DOGE, Musk has doubled down on his political ambitions, now vowing to start a new “America Party” ahead of the 2026 midterms, a move that’s sparked anger among some of his most loyal financial supporters.
“The board can’t just sit here and watch this go by,” said Dan Ives, managing director of Wedbush Securities. “I’m hearing from many shareholders that the frustration is hitting a tipping point.”
In a sharply worded note on Tuesday, Ives called on Tesla’s board to establish “ground rules” for Musk’s political distractions. He also suggested a new performance-based compensation package tied to how much time Musk actually spends running Tesla and an oversight committee to monitor whether Musk’s political ventures are interfering with his duties.
“Tesla is heading into one of the most important stages of its growth cycle, with the autonomous and robotics future now on the doorstep,” Ives wrote. “[It] cannot have Musk spending more and more time creating a political party.”
Other major investors shared similar concerns. James Fishback, CEO of investment firm Azoria—which holds its largest position in Tesla—sent a letter to the board over the weekend urging for answers.
“I encourage the Board to meet immediately and ask Mr. Musk to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO,” he wrote. “I remain hopeful that Mr. Musk will return his full attention to Tesla. If not, I trust the Board will take appropriate action.”
Fishback also said that Azoria is abandoning a planned Tesla-focused investment following Musk’s political announcement.
“This creates a conflict with his full-time responsibilities as CEO of Tesla. It diverts his focus and energy away from Tesla’s employees and shareholders,” the letter read.
Tesla’s stock dropped 7% on Monday after news emerged of Musk’s political plans. The backlash from investors like Ives and Fishback shows how Musk’s political side projects are starting to wear thin, even among his most loyal supporters.
Tesla shareholder and frequent critic Ross Gerber also weighed in.
“No one wants the Elon First party,” he said, slamming the board for letting Musk go unchecked.
Even President Donald Trump took a shot. Speaking to reporters Sunday, he mocked Musk’s ambitions, calling the idea of a third party “ridiculous.”
“Third parties should never work,” Trump said. “So he can have fun with it, but I think it’s ridiculous.”
Musk’s political shift comes at a delicate time for Tesla. The company’s stock lost nearly half its value in the first quarter, and its April earnings report revealed a stunning 71% drop in profits. Investors briefly rallied in April after Musk promised to return his focus to Tesla, but that optimism faded fast when he reignited his public feud with Trump and criticized his Medicaid-slashing tax plan.
Now, with Musk planning to build a whole new political party, the divide only grows wider. While Musk claims that the “America Party” will attract the political middle, it’s unclear who that includes. Democrats haven’t forgotten his role in gutting federal programs through DOGE, and Republican voters still seem loyal to Trump.
“[This] is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” Ives wrote.
And the financial fallout may just be starting. Analysts at William Blair said that Monday’s stock decline indicates growing investor fatigue.
“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 analysts Jed Dorsheimer and Mark Shooter.
So while Musk may see his political party as a moonshot for democracy, Tesla investors are watching a different kind of launch—one that's veering off course.
Alex Samuels July 08, 2025 at 11:30PM From Daily Kos
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