Dan Ives Says Elon Musk Is Dragging Tesla Down. Is It Time to Sell?

Regardless of whether you support Musk's plans or not -- or if you cheered or booed when he was working as President Donald Trump's right-hand man to shrink the size of the federal government with the Department of Government Efficiency (DOGE) -- investors should be deeply concerned Tesla's recent struggles

The stock price is down, deries are faltering, and the one-time darling of the electric vehicle movement is battling some significant headwinds

If you're a Tesla stock owner, is this the time to sell

Or do you have faith that Musk can rally, and Tesla stock is just a bargain for long-term investors

Image source: Getty Images

He soon became a regular fixture at Trump's Mar-a-Lago estate and ed Trump on the campaign trail

All that was extraordinary, considering the immense pressures on Musk's time: in addition to being CEO of Tesla, Musk heads the private aerospace company SpaceX; the social media platform X (formerly known as Twitter); The Boring Company, which is involved in tunnel construction jects the Las Vegas Convention Center loop; xAI, which is generative AI;, and Neuralink, which is dedicated to the development of brain-computer interfaces

Officially classified as a temporary government employee, high-level Musk associates joined numerous government agencies and began cutting staff, cancelling contracts, and restructuring agencies

But for Tesla, it came at a cost

So-called "Tesla takedown" tests began in the spring and included hundreds of demonstrations at Tesla showrooms around the country

In addition, many people stopped buying Teslas -- hammering the company's bottom line

Tesla deries are down sharply so far this year from where they were a year ago

Tesla will release its second-quarter earnings report on July 23

But if it's anything the Q1 report, investors should brace for the worst

In the first quarter, Tesla reported $19. 33 billion in revenue, down from $21. 3 billion in the first quarter of 2024

What did Dan Ives say

Musk split badly from Trump in recent days as the White House pushed Trump's "Big, Beautiful Bill. " Musk says the newly signed law, which will add an estimated $3. 5 trillion to the federal deficit, runs in opposition to DOGE's efforts to cut federal spending

He said the legislation will destroy millions of jobs and "gives handouts to industries of the past while severely damaging industries of the future" -- an obvious reference to the law's elimination of electric vehicle mandates that made EVs more affordable

Musk pledged to begin a new political party, the America Party, as Congress prepared to apve it, although it's un if he's taken any concrete steps to register the party since the law went into effect July 4

But his statements were enough for Webush's Ives, who has been a longtime Tesla bull, to issue a scathing report of concern on Monday: Very simply, Musk diving deeper into and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/holders want him to take during this crucial period for the Tesla story

While the core Musk supporters will back Musk at every turn no matter what, there is [a] broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track

He three things to right the ship: that Tesla's board step in to limit the amount of time Musk spends on, set up a special oversight committee to review Musk's political activities, and give Musk a greater stake in Tesla as an incentive to focus on the company's fits

What investors should do next ly, Tesla is at an inflection point

For investors, what happens next is more how you feel the company's CEO than how you feel its vehicles

But if you are a Musk bull (and I know a lot of them), then this may be your best opportunity to buy a wounded company at a steep discount

But if that's your play, be prepared for a very volatile ride, and plan for a long-term horizon

Patrick Sanders has no position in any of the stocks mentioned

The Motley Fool has positions in and recommends Tesla

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