A leading Tesla Inc. (NASDAQ:TSLA) analyst is calling on the electric vehicle company's Board of Directors to act and set ground rules for CEO Elon Musk as he plans on launching the America Party.
The Tesla Analyst: Wedbush analyst Dan Ives maintained an Outperform rating on Tesla with a $500 price target.
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The Analyst Takeaways: Tesla's Board needs to "act now" and help establish rules for Musk to manage Tesla and his political ambitions, Ives said in a new investor note.
"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," Ives said, adding that this "soap opera must end."
The analyst said that if the American Party contests seats in the Senate and House in the 2026 midterms, it would make Musk an enemy of President Donald Trump and the Republican Party.
Ives said this is the opposite of what Tesla shareholders want now, with the important autonomous regulatory framework part of the Trump administration. "Tesla needs Musk as CEO for another five years at least given how important of a role Musk will play in the autonomous and robotics future of Tesla."
Ives said Tesla, along with Nvidia (NASDAQ:NVDA), are the best physical AI companies in the world and Musk will play a "major role" in the autonomous vehicle success, which could be worth $1 trillion to Tesla's valuation.
The Wedbush analyst calls on Tesla's Board of Directors to take "the bull by the horns" and do the following three things.
1. Develop a new incentive-driven pay package for Musk, which increases his ownership stake in Tesla to up to 25% voting power. Ives said this could help the possibility of Musk merging Tesla and xAI.
"This would solidify Musk as CEO of Tesla over the coming years as we expect him to be CEO at least until 2030."
2. Include requirements for the time commitment to Tesla operations as part of Musk’s pay package. Ives said the Board should provide some "general guardrails" on Musk's time to help with clarification for institutional investors, retail investors, Tesla employees, the Tesla Board and Musk himself.
3. Create a special Board oversight committee. Ives said this Board would center on Musk's political ambitions and would have ground rules of what could violate his pay package. While Tesla's Board of Directors cannot control who Musk donates to politically, Ives said the Board can have oversight to ensure his political ambitions don't "interfere with his role as CEO of Tesla.”
"We urge the Board to act now and move the Tesla story forward with Musk as CEO," Ives said.
TSLA Price Action: Tesla stock is up 2.7% to $302.05 on Tuesday versus a 52-week trading range of $182.00 to $488.54. Tesla stock is down 20.4% year-to-date in 2025.
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