Tesla in Crisis as Elon Musk’s Political Role Sparks Investor Concerns

Tesla, the electric vehicle pioneer, is navigating turbulent waters as its CEO Elon Musk’s dual focus on the company and his political role raises red flags among investors and analysts. According to a recent Forbes article by Derek Saul, Wedbush analyst Dan Ives, a long-time Tesla bull, has labeled the company’s current state as a “crisis,” attributing it to Musk’s divided attention.

Musk, the world’s richest person with a net worth of $327 billion, has been increasingly involved in his role as head of the Department of Government Efficiency under President Donald Trump. This shift has transformed Tesla into a “political symbol,” a development Ives described as detrimental. The consequences have been stark, with protests and vandalism at Tesla showrooms and a notable decline in early-year sales across several regions.

Tesla’s stock performance mirrors these concerns. The stock has plummeted 51% from its December all-time high, wiping out over $700 billion in market value. As of March 20, 2025, the stock was down about 1%, marking its ninth consecutive week in the red. Despite this downturn, Ives maintains a $550 price target for Tesla, suggesting a potential 130% upside from its current price of $233.

To address mounting investor concerns, Ives urged Musk to outline plans for balancing his roles at Tesla and the White House. He also emphasized the need for updates on Tesla’s lower-cost vehicles and the rollout of its full self-driving technology. However, Wall Street remains skeptical. Firms like RBC, Mizuho, Goldman Sachs, JPMorgan, and UBS have issued negative reports, lowering price targets and delivery forecasts. JPMorgan analyst Ryan Brinkman noted that Tesla’s brand has lost value at an unprecedented rate in automotive history.

Musk’s political involvement has further complicated matters. In 2024, he donated $288 million to pro-Trump groups and GOP causes, cementing his influence in Washington. While Commerce Secretary Howard Lutnick praised Tesla’s stock as undervalued during a Fox News appearance, Minnesota Governor Tim Walz publicly celebrated the stock’s decline, stating he checks the share price daily.

This situation underscores the challenges of juggling leadership in both the private and public sectors. For Tesla, the stakes are exceptionally high. With Musk’s net worth now primarily tied to his stake in SpaceX rather than Tesla, the company’s future hinges on his ability to refocus and reassure investors.

Tesla’s struggles serve as a cautionary tale about the risks of intertwining corporate leadership with political activism. As the world watches, the question remains: Can Elon Musk steer Tesla back on track, or will his political ambitions continue to overshadow the company’s potential?

This unfolding story highlights the human impact of leadership decisions, reminding us that even the most innovative companies are not immune to the consequences of divided focus. The coming months will be critical for Tesla as it seeks to regain investor confidence and chart a path forward amidst mounting challenges.