As Tesla Inc (NASDAQ:TSLA) CEO Elon Musk pursues his political aspirations, Wedbush analysts have called on the EV-maker’s board of directors to take decisive action to preserve leadership stability and protect shareholder interests.
The analysts reiterated their ‘Outperform’ rating on Tesla and a $500 price target, while warning that the “soap opera must end.”
Musk, who recently distanced himself from both the Trump Administration and cryptocurrency Dogecoin, announced plans to launch a political organization dubbed the “America Party,” which he says would caucus independently and engage with both major parties.
The development, Wedbush argues, marks “a tipping point in the Tesla story.”
“The Tesla board needs to act now and set the ground rules for Musk going forward around his political ambitions and actions,” they wrote.
According to Wedbush, Tesla is entering a critical growth phase centered on artificial intelligence, robotics, and autonomy, sectors in which Musk is seen as pivotal. The firm estimates the autonomous vehicle opportunity alone could contribute $1 trillion to Tesla’s long-term valuation.
“We view Tesla along with Nvidia as the two best physical AI companies in the world and Musk will play a major role in this success,” Wedbush wrote.
However, Musk’s potential pursuit of congressional seats in the 2026 midterms, the analysts wrote, could put him at odds with former President Donald Trump and the GOP, an outcome they describe as “exactly the opposite of what Tesla shareholders want to see with a very important autonomous regulatory framework now on the horizon during the Trump Administration.”
Growing ambitions risky
The firm is urging Tesla’s board to implement a structured plan to secure Elon Musk’s leadership while addressing concerns about his growing political ambitions.
“With the legal battle still playing out on Musk's $56 billion deal, we believe the board now has to take the bull by the horns,” the analysts wrote.
Wedbush recommends creating a new performance-based pay package that would raise Musk’s ownership to around 25% voting power, with shareholders voting on the proposal at the next annual meeting.
This package would also outline how much time Musk must dedicate to Tesla operations, establishing clearer expectations for his role.
In addition, the analysts propose forming a special oversight committee to monitor Musk’s political activities and ensure they do not interfere with his responsibilities as CEO.
While the Board cannot control Musk’s political donations, Wedbush believes it can and should enforce guardrails if those ambitions begin to conflict with Tesla’s strategic priorities.
“We urge the Board to act now and move the Tesla story forward with Musk as CEO,” they concluded.
Tesla shares traded up 2.5% at about $301 on Tuesday afternoon, down more than 25% this year.