Tesla Investors Worried as Elon Musk Shifts Focus to New Ventures and Political Connections

Tesla investors are increasingly uncertain about the company's future, with some questioning CEO Elon Musk’s focus on Tesla as he becomes more involved in other ventures. One notable investor, Ross Gerber, CEO of Gerber Kawasaki Wealth & Investment Management, has raised concerns that Musk’s attention is divided, potentially jeopardizing Tesla’s progress.

Growing Doubts from Longtime Shareholders

Ross Gerber, a well-known Tesla investor, recently reduced his stake in the company from 420,000 shares to 266,000 shares, valued at around $50 million. Once a staunch supporter of Tesla and Musk, Gerber now fears that "Tesla’s best days are behind it." He was an early investor during Tesla’s challenging years in 2018 and 2019, standing by Musk when few others did, and that faith paid off as Tesla became a market leader.

However, Gerber is now concerned that Musk’s focus on projects outside of Tesla, such as building humanoid robots, managing the social media platform X (formerly Twitter), and launching rockets via SpaceX, may be putting the company’s future at risk. "Elon is not focused on building Tesla," Gerber said, stressing that Musk’s divided attention could be limiting Tesla’s growth potential.

Tesla’s Recent Performance Raises Concerns

Tesla’s latest financial results have added to the unease among investors. In the second quarter of this year, Tesla missed earnings expectations despite slightly exceeding revenue forecasts. The company delivered 440,000 vehicles during the quarter, just above what analysts had predicted, but this modest achievement has not eased the worries about Tesla's near-term outlook.

Gerber believes Tesla could face even tougher quarters ahead. He pointed out that the used car market is currently saturated with Teslas, a trend that he partially attributes to Musk’s distraction with X. He warned that Musk’s preoccupation with other ventures could hurt Tesla’s performance in the coming months.

Political Ties Add Another Layer of Concern

Musk’s political ties, particularly his relationship with former President Donald Trump, are also raising eyebrows among Tesla investors. Gerber described Trump as “the worst thing for Tesla,” arguing that his policies—such as plans to repeal the $7,500 electric vehicle tax credit and his support for the oil industry—are at odds with Tesla’s mission of advancing sustainable energy.

Many investors fear that Musk’s association with Trump could damage Tesla’s brand and limit its appeal to environmentally conscious consumers. There are also concerns that Musk’s political connections might be more about controlling the narrative on X, rather than focusing on Tesla’s core business of making electric vehicles.

Tesla’s Retail Investors Remain Hopeful

Despite these concerns, Tesla retains a strong base of loyal retail investors who continue to believe in the company’s long-term potential. Alexandra Merz, a Tesla shareholder and CEO of L&F Investor Services, is optimistic about Tesla’s future. She believes that Tesla’s stock is undervalued and could rise significantly, driven by the company’s advancements in AI and robotics.

Merz sees Tesla’s AI technology as a major competitive advantage, one that will allow it to outpace rivals like General Motors (GM). She also has faith in Tesla’s humanoid robot, Optimus, despite skepticism from some industry experts.

Debate Over Tesla’s Future Direction

However, not all investors share Merz’s enthusiasm for Tesla’s robotics endeavors. Gerber, for instance, is critical of Musk’s focus on the Optimus project, arguing that Tesla’s value should be assessed based on more tangible metrics rather than speculative ventures. "The last thing I need is some robot built by Elon Musk in my house," Gerber quipped, expressing doubt that the robotics initiative will significantly impact Tesla’s bottom line.

Tesla’s Future Hangs in the Balance

Tesla’s direction seems uncertain as investors weigh the effects of Elon Musk’s growing ventures and political ties. Some investors, like Alexandra Merz, still believe Tesla will thrive, driven by its innovations in AI and robotics. However, others, such as Ross Gerber, worry that Musk's focus has drifted too far from Tesla, putting its future at risk.

As Tesla faces more competition in the electric vehicle market, its success will likely depend on whether Musk can balance his new ventures with Tesla's core business. Investors remain divided on whether the company can stay strong under Musk's leadership.

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