Tesla (TSLA), which sells nearly half of all electric vehicles in the U.S., has long been synonymous with its founder and CEO Elon Musk. But this tie is increasingly becoming a liability for some of Tesla’s major investors. “The company’s reputation has just been destroyed by Elon Musk,” Ross Gerber, a wealth manager and early Tesla investor, told the U.K.’s Sky News in an interview published today (March 19).
Gerber, who currently owns 262,000 shares of Tesla stock through his firm Gerber Kawasaki Wealth & Investment Management, added that Musk needs to either find a new CEO for Tesla or step away from his political efforts as head of the Trump administration’s Department of Government Efficiency (DOGE).
Musk owns or runs at least five companies other than Tesla. In its annual report last year, Tesla listed out Musk’s involvement in ventures like SpaceX, X and xAI as a risk factor given that the CEO “does not devote his full time and attention to Tesla.”
But none of Musk’s external activities have generated as much public backlash as his recent entry into right-wing politics. The Musk-helmed DOGE, which has slashed federal budgets and workforces in recent months, has turned Tesla into a target for those upset at the billionaire’s growing political influence.
Besides materializing in protests against Tesla dealerships and vehicles, this negative sentiment has dented Tesla’s EV sales and stock price. Tesla’s share price is down about 50 percent since it’s December high following Trump’s election win. Sales is falling in all of its key markets.
Investors want a new Tesla CEO
“You literally can’t sell the best product in the marketplace because the CEO is so divisive,” said Gerber of Musk’s impact on the carmaker’s standing. “It’s time for somebody to run Tesla. The business has been neglected for too long,” added the investor, who cited DOGE as one of the reasons why he’s selling off shares.
Other notable Tesla backers appear to share Gerber’s sentiments. Christopher Tsai, an investment manager with 75,000 shares in the EV company, urged Musk to return his attention to Tesla in a recent interview with the Guardian. “I hope his involvement with [DOGE] is short-lived,” said Tsai, who manages a $137 million portfolio at his firm Tsai Capital.
It isn’t just investors who are upset with Musk. For some Tesla owners, the electric vehicles have turned into an unwanted political statement. “I bought a Tesla because it was fast like a rocket ship,” said Senator Mark Kelly, an Arizona Democrat, in an X post earlier this week where he revealed he was selling his Tesla. “Every time I drive it, I feel like a rolling billboard for a man dismantling our government and hurting people,” he added. Registrations for Tesla vehicles fell by 11 percent in the U.S. in January compared to the year prior, according to data from S&P Global Mobility.
Even longtime Tesla bulls are changing their tune. “There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares,” said Dan Ives, an analyst with Wedbush Securities, in a client note earlier this month. If Musk’s focus remains on DOGE, “then brand damage will become more pervasive,” he added.
This isn’t the first time Musk’s external activities have caused a crisis for investors. After the entrepreneur acquired Twitter, now known as X, for $44 billion in 2022, Tesla shareholders urged Musk to refocus his attention to the carmaker, with Musk eventually stepping down as the platform’s CEO in 2023. “We have been here before with Musk many times over the last decade… and he ultimately stepped up for Tesla shareholders,” said Ives, who described the CEO’s handling of Tesla’s turbulence over the next few months as “critical.”
