Tesla's die-hard bulls Dan Ives calls for limiting Musk's "involvement in politics," Musk: Shut up!

Even Tesla's most steadfast supporters are beginning to express concerns about Musk's political ambitions.

On July 8 (Tuesday), Dan Ives, the most bullish analyst on Tesla from Wedbush Securities, made three suggestions to Tesla's board on the social platform X:

1. The Tesla board should create a new compensation plan for Musk, granting him 25% voting control to pave the way for the merger with xAI;

2. As part of the compensation plan, set a threshold for Musk's working hours at Tesla;

3. Oversee Musk's political activities.

However, Musk showed no regard for Dan Ives, directly retorting: "Shut up, Dan!"

Before Ives made these suggestions, Musk had just announced the establishment of a new political party called the "American Party" over the weekend. Subsequently, Tesla's stock price plummeted nearly 7% on Monday, wiping out $68 billion in market value. This may indicate that investors' concerns about Musk being distracted by political affairs are intensifying.

As a "die-hard bull" on Tesla, Ives had previously set a target price of $500 for the stock, the highest among all analysts tracked by FactSet.

In addition to publicly posting, the Wedbush analyst team recently released a report titled "The Tesla Board Must Act and Set Basic Rules for Musk; The Soap Opera Must End." In the report, Ives stated that Musk's establishment of a new political party has become a "turning point in the Tesla story," and the board must take action to restrain the CEO.

Despite Musk's harsh response, Ives still expressed understanding. In his response to CNBC, he stated:

"Elon has his views, I understand, but we still believe this is the right course of action for the board."

Analysts warn that Musk's political involvement could further harm Tesla's performance at a critical time when electric vehicle sales are slowing, and the company is betting on autonomous driving and robotics technology. The stock has already fallen about 25% this year, performing the worst among tech giants. This performance highlights that investors' concerns about Musk's increasing political involvement are translating into actual market losses.

Investor Concerns Spread

Reports indicate that Ives is not the only Tesla supporter expressing concerns about Musk's political activities. William Blair analysts downgraded Tesla's stock from buy to hold on Monday, citing Musk's political plans and statements, as well as the spending bill passed by Congress, which could negatively impact Tesla's profit margins and electric vehicle sales.

The analysts wrote: "His return to politics will only bring negative effects."

We expect investors to grow increasingly weary of this distraction, especially at a time when the business needs Musk's attention the most. We believe his return to politics will only bring negative impacts. We hope this effort can shift towards launching robotaxi at this critical moment.

James Fishback, CEO of hedge fund Azoria Partners, stated last Saturday that his company has postponed the listing plan for the Azoria Tesla Convexity ETF, which specializes in investing in Tesla stocks and options. Fishback posted on the X platform that "Elon has gone too far" and called for the board to convene immediately to demand Musk clarify his political ambitions.

Political Ambitions of the "American Party"

Musk announced the establishment of the "American Party" last Saturday, claiming it will "liberate" Americans, but has yet to share formal details, including where the party will register, how much funding he will provide, and which candidates he will support.

This move comes after Musk's efforts earlier this year to collaborate with the Trump administration and lead significant cuts to the federal government. His formal role in the U.S. government ended in late May, following public disputes with Trump over issues such as spending bills.

The compensation controversy Tesla previously faced continues. Musk's CEO compensation plan worth approximately $56 billion from 2018 was overturned by a Delaware Chancery Court last year, with Judge Kathaleen McCormick ruling that Tesla board members lacked independence and failed to negotiate fairly with the CEO. Tesla has appealed to the Delaware Supreme Court