There is a sense of 'exhaustion' among Tesla Inc (NASDAQ:TSLA) investors as Elon Musk continues to head down the political track.
That is the conclusion of analysts at Wedbush after the CEO launched a new “America Party” on X, diverting attention from the electric-vehicle maker’s core business.
Ahead of trading on Monday, Tesla’s shares were down around 6%, eliminating almost $60 billion from the company’s market value.
Wedbush reiterated an 'outperform' rating on Tesla, maintaining a $500 price target, but warned that Musk’s deepening political engagement poses a “disruptive” overhang on the stock’s performance.
The analysts, led by long-time Tesla bull Dan Ives, cautioned that a new independent party could aggravate tensions with the Republican establishment and President Donald Trump.
It also potentially invites regulatory or political hurdles for the EV maker and its related ventures.
The report highlights that following Musk’s withdrawal from overt political associations with Whitehouse and the Trump administration, investors briefly welcomed his refocused leadership of Tesla.
That respite has proved short-lived, with the latest announcement on the “America Party” reigniting concerns over divided executive attention and governance risks.
Despite these headwinds, Wedbush maintained its conviction in Tesla’s long-term prospects.
It pointed to the company’s leading position in autonomous driving and its advancing artificial intelligence capabilities as key drivers of future earnings growth.
It noted that, although Tesla’s 2025 earnings per share are expected to drop to $1.80 from $2.42 in 2024, the stock-and-operating-asset valuation underpinning a sum-of-the-parts analysis still justifies a premium target of $500.
Risks to this outlook include potential capital raises, production bottlenecks in Fremont and Shanghai, and regulatory challenges in China, all of which could derail growth and compress margins.
However, the analysts argued that these are counterbalanced by Tesla’s technological advantages and scalable business model.
While Wedbush acknowledges that political distractions may weigh on near-term sentiment, it maintains that underlying fundamentals and innovation leadership render the stock attractive on a 6–12-month horizon.
The shares were marked down $19.15 to $296.20.