Tesla shares are likely to face increased pressure after CEO Elon Musk said he will launch a new political party, Wedbush analysts said in a Sunday note, given that it will likely further divert Musk’s attention away from the company.
Wedbush said that Musk diving deeper into politics is “exactly the opposite direction” that Tesla (NASDAQ:TSLA) investors and shareholders want from the CEO, especially as the electric car company grapples with declining sales and prepares a pivot into autonomous vehicles.
Musk’s announcement of the “America Party” also comes amid a bitter public feud between the Tesla CEO and U.S. President Donald Trump, especially over the recently-approved “big beautiful bill.”
Wedbush noted that while Tesla investors were initially relieved by Musk stepping down from DOGE, this relief was likely to be short-lived with Musk’s latest move presenting a turn for the worse.
“Tesla shares will likely be under some pressure tomorrow as investors worry about the implications if Trump and (the) Republican party view Musk more as a foe than a friend now,” Wedbush analysts said.
They noted that independents had a poor track record in the U.S., and that the America party venture was likely to be disruptive for Tesla and a political gamble by Musk.
Wedbush flagged the potential for Tesla’s board also getting involved, depending on how far Musk takes his political endeavors.
Tesla shares are trading down nearly 17% so far in 2025. While they came off their annual lows, they still remained under pressure from months of declining sales, and more recently, concerns over Musk’s political actions.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. Wedbush still maintained its Outperform rating and $500 price target on Tesla, remaining “firmly bullish” on the EV maker’s artificial intelligence ambitions.
The company had recently tested an autonomous driving service in Austin, Texas, albeit to limited investor cheer. Tesla is also seeking to foray into robotics with its Optimus robot, which Musk claims will go into production by 2026.
