Is Musk’s Political Pivot Good for Tesla? Experts Weigh In

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RegExp("[?&]notifications=1(&|#|$)");"desktop"===y&&i&&b.test(window.location.search)&&(i.checked=!0)};be("ybar-mod-notification",(function(e){var t={isUH3:"crunch"===e.getConfig().ytheme,notifContainer:document.getElementById("notification-container"),notifBadge:document.getElementById("notif-badge"),notifMenu:document.getElementById("ybarNotificationMenu"),notifMenuOpener:document.querySelector("#ybarNotificationMenu + label"),notifDropdown:document.getElementById("notifDropdownContainer"),tooltipContainer:document.querySelector(".".concat(Vn)),notifLabel:document.querySelector(".".concat($n))};t.notifDropdown&&ro(e,t)}))}()}};]]>Heather AltamiranoTue, Jul 22, 2025, 4:36 PM 4 min readIt’s been a rough ride for Tesla (TSLA) over the past few months. As CEO Elon Musk focused his attention on the Department of Government Efficiency (DOGE), Tesla’s company and stock saw some dramatic volatility.Musk left DOGE in May and committed to focusing on Tesla. Since then, however, he had a public blowout with President Donald Trump and is now talking about forming a political party called the American Party, according to a post he wrote on X, which is creating chaos for the brand and uncertainty for investors.Read Next: Here’s What Musk’s White House Exit Could Mean for the Future of DOGE — And Your WalletExplore More: 5 Cities You Need To Consider If You're Retiring in 2025While Musk redefined the car industry, his avid political interests have shaken up the market and spooked investors. Read on for experts’ take on whether Musk’s pivot is good for the company and the stock.In the first quarter, electric vehicle (EV) sales increased more than 11% year over year, per Cox Automotive, but Tesla hasn’t been riding that wave. Tesla saw its sales fall, and many attributed that, in part, to Musk’s political involvements earlier this year.In the company’s first quarter earnings release, it reported that net income fell by 71% year over year, per NPR, and in the second quarter, it reported that sales plunged a record 13.5% year over year, per CNN.Its stock also saw a lot of volatility during this time. On the first trading day of 2025, Tesla stock closed around $380. By the end of March, it had fallen to around $260. It has since recovered some of those losses and is trading around $330 as of July 22.“When Musk got into politics, it created confusion for investors,” said Gilbert Michaud, Ph.D., assistant professor of environmental policy at Loyola University Chicago. “When he removed himself from DOGE, things got better.”However, Musk is still involving himself in politics and offering criticisms of the president on social media, which has led to more volatility in the stock.Check Out: 3 Ways Trump’s ‘Big Beautiful Bill’ Could Hit Tesla InvestorsInvestors expect a strong visionary at the helm of a company to guide it to success, and Musk was that trailblazer, but some people are now questioning his choices.“Every time Musk leans heavily into politics, Tesla’s stock tends to react and not always positively,” according to Michael Foguth, founder and president of Foguth Financial Group. “Investors typically want leadership that’s focused on operations and innovation, not controversy. His new political party initiative could become a distraction and raise concerns over long-term vision and brand stability.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,358.91 +49.29 (+0.78%)Dow 3045,010.29 +507.85 (+1.14%)Nasdaq21,020.02 +127.33 (+0.61%)Russell 20002,283.13 +34.37 (+1.53%)VIX15.37 -1.13 (-6.85%)Gold3,398.10 +0.50 (+0.01%)PortfolioSign in to access your portfolioSign inTop gainersABVX ABIVAX Société Anonyme 68.60 +58.60 (+586.00%)LBRT Liberty Energy Inc. 13.25 +2.00 (+17.78%)VICR Vicor Corporation 52.68 +7.48 (+16.55%)LW Lamb Weston Holdings, Inc. 57.19 +8.02 (+16.31%)HIMS Hims & Hers Health, Inc. 58.02 +8.01 (+16.02%)Top losersENPH Enphase Energy, Inc. 36.48 -6.02 (-14.16%)FI Fiserv, Inc. 143.00 -22.98 (-13.85%)TXN Texas Instruments Incorporated 186.25 -28.67 (-13.34%)OTIS Otis Worldwide Corporation 88.49 -12.50 (-12.38%)MARA MARA Holdings, Inc. 17.57 -2.31 (-11.62%)Most activeLCID Lucid Group, Inc. 3.0800 -0.0500 (-1.60%)NVDA NVIDIA Corporation 170.78 +3.75 (+2.25%)MARA MARA Holdings, Inc. 17.57 -2.31 (-11.62%)NIO NIO Inc. 4.9200 -0.0900 (-1.80%)WBD Warner Bros. 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