Should Elon Musk Ditch Politics To Save Tesla? Experts Weigh In
Written by
Laura Bogart
Edited by
Kristen Mae
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
It’s no secret that Elon Musk is making headlines — though not necessarily the kind many Tesla investors want to see. When Musk first emerged on the scene as a nerdy tech entrepreneur turned billionaire mogul, his popularity added a sheen of glamor and prestige to his business empire, especially Tesla. For people who cared about carbon emissions and looking cool, Teslas were the car.
Not so much anymore, it seems. As the Musk-led Department of Government Efficiency (DOGE) makes sweeping cuts to government agencies, Musk’s veneer of being a sort of real-life Iron Man is eroding among the public.
From protests at dealerships, recalls of Cybertrucks (not to mention widespread vandalism of the vehicles), and volatile stock prices, some industry insiders and experts are wondering whether Musk’s involvement in political discourse is costing the brand more than it’s worth.
Dan Ives: Tesla Is Dealing With a Brand Crisis
If Tesla has one great champion — the biggest bull of them all — it’s Dan Ives of Wedbush Securities. A longtime Tesla supporter, Ives has backed the company through its many ups and downs. Now, as one TradingView headline put it, “Even Dan Ives is getting sick of Tesla stock.”
According to reports from Fortune and other outlets, Ives and some investors believe Musk’s involvement in politics is a catalyst for a brand crisis that has tarnished the car manufacturer’s reputation. He’s quoted in Fortune as saying the brand is now “at a tornado crisis moment for Musk and Tesla.”
That same report highlighted Ives’ assertion that shareholders are increasingly frustrated with how Musk’s involvement in politics has hurt the brand. “The clock struck midnight,” the analyst added.
William Lee: Focusing on Innovation Could Only Help
In an interview with Al Jazeera, William Lee, chief economist at the Milken Institute, attributes the fall in Tesla’s share prices primarily to production delays and a lack of new models. “The new refresh for the Tesla Model Y continues to be delayed, and more importantly, no new models have been introduced,” he said.
Lee also cited disappointments in Tesla’s slow rollout of promised innovations in self-driving technology and robotics as other major reasons for investor disappointment. These gaps in the innovation pipeline — arguably what Tesla is best known for — have left many investors wondering if it’s time for Musk to step out of the political limelight and back into the lab.
“Musk’s active participation in the U.S. government is viewed as a distraction from his ability to drive his companies to produce the innovations that he has promised on time,” Lee said.
Tesla Employees: Business as Usual, but With Growing Concerns
While financial experts can weigh in with detailed market analysis, there’s one group of people with a unique perspective on how Musk’s leadership impacts the company: Tesla employees. That’s why Business Insider spoke with a number of Tesla team members during its own investigation of the turmoil the car maker is facing.
Their responses were mixed. One employee told Business Insider that market volatility is part and parcel of working at Tesla, regardless of Musk’s political proclivities: “For anyone who’s worked at Tesla, this isn’t anything new,” he said. “There’s been so many ups and downs at Tesla, you get desensitized at a certain point.”
However, other employees are concerned. A longtime engineer told Business Insider that Tesla’s mission seems to have shifted in ways not everyone supports. “Morally, I’m not sure how much longer I can work for somebody like that,” they said.
The Verdict: Should Musk Step Away From Politics?
The question remains: Would Musk stepping away from politics help restore Tesla’s reputation — and stock price? Experts like Dan Ives and William Lee seem to agree that refocusing on product development and innovation could go a long way toward restoring investor confidence. Meanwhile, some employees are growing uneasy, even if they’ve seen Tesla weather tumultuous periods before.
Whether Musk hears the growing criticism remains to be seen, but one thing is for sure — his actions, both inside and outside of Tesla, will profoundly impact the company’s future.
More From GOBankingRates
