Tesla (TSLA) investors have had a turbulent year so far, and CEO Elon Musk’s political involvement hasn’t made things any smoother. After Musk’s recent decision to launch his own political party — the America Party — Tesla shares have once again come under pressure. Musk’s ongoing feud with Trump, combined with concerns about the CEO’s divided attention, has investors worried about the EV giant’s long-term prospects. In response to these mounting concerns, Dan Ives of Wedbush Securities, one of Wall Street’s most closely followed Tesla analysts, has laid out a detailed three-step plan to help stabilize Tesla and regain investor confidence.
In this article, we’ll break down the details of Ives’ recommendations and explore why he believes these specific initiatives are essential. With that, let’s dive in.
About Tesla Stock
Tesla (TSLA) is a prominent innovator dedicated to accelerating the global transition to sustainable energy. The Elon Musk-led powerhouse designs, develops, manufactures, leases, and sells high-performance fully electric vehicles, solar energy generation systems, and energy storage products. It also offers maintenance, installation, operation, charging, insurance, financial, and various other services related to its products. In addition, the company is increasingly focusing on products and services centered around AI, robotics, and automation. It currently has a market cap of $1.01 trillion.
Shares of the EV maker have dropped 22% on a year-to-date basis. The stock recently came under renewed selling pressure after CEO Elon Musk announced the formation of a new political party called the America Party, prompting backlash from President Donald Trump and fueling worries about potential consequences for Musk’s businesses.
Tesla Bull Dan Ives Outlines 3-Step Plan to Save TSLA Stock
Wedbush Securities analyst Dan Ives has long been among the most bullish Tesla watchers on Wall Street. Ives maintains a “Buy” rating on TSLA stock with a $500 price target — the highest forecast among all analysts. However, last Tuesday, the analyst took to X to voice criticism of CEO Elon Musk’s political activity, after the world’s richest person announced the formation of the new political party to oppose Trump’s “Big Beautiful Bill.”
Ives stated that Tesla’s story has hit “a tipping point.” “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,” he wrote in a note. The analyst urged the board to take the following three steps to steer the company back on track:
Step 1: “New pay package getting Musk to 25% voting control. Clears a path for xAI merger.”
Dan Ives proposed creating a new performance-based pay package that would grant the CEO a larger ownership stake in the company and up to 25% of the voting power. “This would also create a framework that potentially Musk could drive Tesla to merge with xAI,” Ives wrote, referring to Musk’s startup that now owns the X social media platform, “and create one of the most powerful AI companies in the world under one roof over the next 12 to 18 months.”
Meanwhile, xAI rolled out an updated version of its flagship AI model, Grok 4, last week. Musk and the xAI team emphasized Grok 4’s multimodal capabilities, quicker reasoning, upgraded interface, and enhanced voice interaction. On Saturday, Tesla launched a new software update for its vehicles, featuring the highly anticipated integration of Grok. However, the company noted that in its current version, Grok does not issue commands to the car — it functions much like having Grok on your phone, except it’s integrated into the vehicle’s onboard computer.
Musk’s pay package has long been a key point of attention. His historic 2018 CEO compensation package, initially valued at roughly $56 billion and now worth even more, was struck down last year by the Delaware Court of Chancery. Judge Kathaleen McCormick ruled that Tesla’s board members were not sufficiently independent from Musk and failed to engage in proper negotiations with the CEO. Tesla has appealed the case to the Delaware Supreme Court and is currently working to determine the structure of Musk’s next pay package.
The EV giant recently said in a filing with the U.S. Securities and Exchange Commission (SEC) that it will hold its annual shareholder meeting on Nov. 6. In response to the news, Ives stated that Musk’s new pay package will be the main focus.
Step 2: “Guardrails established for amount of time Musk spends at Tesla as part of pay package”
Ives’ suggestions did not include restricting Musk from engaging in political activities. Instead, he proposed setting “guardrails” around the amount of time Musk must dedicate to Tesla and tying compensation to those commitments. More precisely, Ives’ proposed new pay package would include a requirement outlining how much time Musk must spend on Tesla’s operations to receive the compensation. “Some general guardrails on this front would help everyone involved, including institutional investors, retail investors, Musk himself, the Board, and Tesla employees around the world,” Ives wrote.
Tesla’s brand value has been on the decline since 2024, partly due to Musk’s controversial political activities, with many analysts warning that the brand faces a long path to recovery or that there may be permanent damage to TSLA. Meanwhile, we’ve already seen what investors really want from Musk — Tesla stock rallied after he announced during the Q1 earnings call that he would “significantly” scale back his involvement with the Department of Government Efficiency (DOGE), overshadowing disappointing headline figures. Musk eventually left the Trump administration and DOGE in late May.
In early July, Tesla reported around 384,000 vehicle deliveries in the second quarter, a 14% year-over-year decline and the second consecutive quarterly drop, though the figures were better than some analysts had feared. Investors are now awaiting the company’s Q2 results, set to be released after the market close on July 23, for fresh insights into the brand’s health. The company will also provide an updated 2025 outlook, after pulling its guidance in Q1 due to economic uncertainty and its impact on the business.
Step 3: “Oversight on political endeavors”
Ives believes Tesla should create a special board oversight committee solely focused on Musk and his political activities. Notably, public company boards often form special committees to address specific, complex, or sensitive issues that demand focused attention and, in some cases, independent oversight. These committees are typically tasked with handling matters such as mergers and acquisitions, conflicts of interest, internal investigations, and litigation.
In Tesla’s case, Ives recommended forming a special board oversight committee to establish clear guidelines on which political activities would breach the terms of the pay package. “The Board cannot control Musk’s donations … but they can have oversight if his political ambitions/endeavors interfere with his role as CEO of Tesla,” he wrote. With that, the special committee would be responsible for overseeing the pay package and determining whether Musk has violated its boundaries.
“We urge the Board to act now and move the Tesla story forward with Musk as CEO,” Ives wrote. At the same time, Musk quickly responded, telling the analyst to “Shut up.”
What Do Analysts Expect for TSLA Stock?
Wall Street analysts maintain a cautious stance on TSLA stock, with ratings differing significantly among those who cover the company. While 12 analysts rate the stock as a “Strong Buy” and two as a “Moderate Buy,” 16 recommend holding, and 10 have issued a “Strong Sell” rating. Overall, TSLA stock has a consensus rating of “Hold.” Notably, the stock currently trades above its average price target of $297.69.
