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You are at:Home»Business»Tesla board needs ‘ground rules’ for Musk’s political activism, analyst says
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Tesla board needs ‘ground rules’ for Musk’s political activism, analyst says

Buddy DoyleBy Buddy DoyleJuly 9, 2025No Comments4 Mins Read
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Tesla board needs ‘ground rules’ for Musk’s political activism, analyst says
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Tesla CEO Elon Musk’s plan to launch a new political party has rekindled concerns about his political activism, distracting him from his duties as the leader of Tesla. The CEO’s latest foray into politics has prompted an analyst with a bullish view of Tesla to call for the board to step in to keep things on the rails.

Musk, who departed his DOGE role with the Trump administration this spring, has recently criticized the One Big Beautiful Bill Act, a landmark tax and spending bill the White House and congressional Republicans narrowly passed last week. President Donald Trump signed the bill into law on July 4.

He slammed the legislation as a “monstrosity” and said he would create a new America Party to try to undermine the dominance of the Democratic and Republican parties over the U.S. electorate, a move which caused Tesla stock to slide on Monday.

Wedbush Securities managing director and senior equity research analyst Dan Ives has covered the tech sector heavily and sees great potential in Tesla. Still, in an investor note on Tuesday, he said Musk’s latest move is a “tipping point” and urged the board to step in with a new framework to ensure Tesla remains a focus amid his political ambitions.

TESLA SHARES SLIDE AFTER MUSK ANNOUNCES NEW POLITICAL MOVE

“In a nutshell, 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,” Ives wrote. 

“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.”

Ticker Security Last Change Change %
TSLA TESLA INC. 297.81 +3.87 +1.32%

He added that Musk saying he will fund primary challenges against some GOP members who backed the bill could antagonize President Donald Trump and Republican lawmakers, which is “exactly the opposite of what Tesla shareholders want to see with a very important autonomous regulatory framework now on the horizon during the Trump Administration.”

MUSK CONDEMNS LATEST SENATE BILL THAT WOULD ‘DESTROY MILLIONS OF JOBS,’ RAISE TAXES ON WIND, SOLAR PROJECTS

Elon Musk and President Donald Trump

Ives said the legal dispute over Musk’s $56 billion compensation package is still playing out, with Tesla needing to keep Musk as CEO for at least five more years given the work on autonomous vehicles and robotics that is underway.

He suggested the Tesla board take three steps to keep Musk aligned with Tesla’s work, including a new incentive-driven pay package that would increase his ownership of the publicly-traded company to about 25% voting power. 

It would also create a framework that Musk could potentially use to merge Tesla and xAI, his artificial intelligence startup that now owns the X social media platform.

ELON MUSK CELEBRATES AS TESLA COMPLETES FIRST SELF-DRIVING DELIVERY TO CUSTOMER

People protest against Elon Musk in California

Part of the new pay package would stipulate how much time Musk needs to spend on Tesla’s operations to receive the pay package. Ives said general guardrails on this subject “would help everyone involved, including institutional investors, retail investors, Musk himself, the Board, and Tesla employees around the world.”

He also called for a special board oversight committee to consider ground rules related to what political activities would violate the pay package, explaining that while they can’t control his donations, they can determine when his activities interfere with his role as Tesla’s CEO.

“We urge the Board to act now and move the Tesla story forward with Musk as CEO,” Ives wrote, noting that the firm has retained its “outperform” rating for Tesla as well as its 12-month price target of $500.

Read the full article here

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