Tesla Board Faces Urgent Calls to Rein in Elon Musk After Political Party Vow Tanks Stock

Tesla’s board of directors is under intense pressure to establish clear boundaries for CEO Elon Musk’s political activities, following a significant drop in the electric car maker’s stock. The decline comes after Musk’s recent announcement to form a new political party.

Wedbush Securities analyst Daniel Ives issued a stern warning to the board this week, urging them to “act now” and implement measures to curb Musk’s increasing entanglement in Washington. Ives highlighted concerns that Musk’s political pursuits could jeopardize Tesla’s future, particularly as the company navigates critical advancements in autonomous technology and robotics.

Musk’s July 4th declaration about launching the “America Party” — a move that followed his public split with former President Trump — triggered a nearly 7% plunge in Tesla shares on Monday, wiping out an estimated $68 billion in market capitalization. The stock remained flat in pre-market activity on Tuesday.

Ives presented a three-point plan for the board, including a new incentive-driven pay package tied to increased ownership, clear guidelines for Musk’s time commitment to Tesla, and the creation of an oversight committee for his political activities. The analyst stressed the urgency, stating, “We urge the Board to act now and move the Tesla story forward with Musk as CEO,” while still maintaining a positive long-term outlook for Tesla as a leading AI company.

Musk’s direct response to Ives on X (formerly Twitter) was a terse, “Shut up, Dan.” The analyst, however, reiterated his stance, affirming the necessity of his recommendations for the board.

This latest development adds to existing concerns about Musk’s focus, with prior reports indicating the board had explored succession planning due to his involvement in outside ventures. Despite denials from Musk and Board Chair Robyn Denholm, Wall Street continues to scrutinize the CEO’s commitment to Tesla amid his escalating political engagement.

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