Elon Musk works more for Trump and less for Tesla

Elon Musk is Tesla’s ( TSLA ) chief executive only today and is more intent on wielding power in the incoming Trump administration, an outspoken investor in the electric carmaker claimed.

“(Elon Musk) certainly sets the direction and the tone of the business and oversees the senior executives who are responsible for all the different projects, but in the traditional sense of running a business, like what’s going on at Nvidia (and the CEO) . Jensen Huang), no, I mean, he’s not at all,” said Gerber Kawasaki Wealth and Investment Management president Ross Gerber on Yahoo Finance’s Catalysts (video above).

“I think Tesla’s shareholders are more than aware that their CEO is working for Donald Trump at this point,” Gerber added.

The bromance between Musk and President-elect Donald Trump has been on full display for months.

Trump and Musk have publicly praised each other, and the latter has donated at least 132 million dollars to the campaigns of Trump and other Republicans.

For his public support, Trump assigned Musk a role in his administration, along with another ardent supporter, Vivek Ramaswamy, as head of a newly created Department of Government Efficiency (DOGE).

Musk has spent a lot of time at Trump’s Mar-a-Lago resort, where he has met world leaders and advised Trump. He even waded into a contentious debt ceiling debate this month that nearly led to a government shutdown.

Read more: How a government shutdown would affect your student loans, Social Security, investments and more

Nevertheless, the market has rallied since Trump’s presidential victory in November, particularly sectors seen as benefiting from his policies. Although the president-elect has not been a fan of green energy and may withdraw the $7,500 EV credit created during the Biden administration, Tesla may be in a favorable position because of its CEO’s connection to Trump.

Tesla shares rose more than 1% Tuesday in premarket trading. Shares are up 74% since Election Day, outpacing the S&P 500’s gain of nearly 5%.

Gerber believes 2025 will prove crucial for Tesla and Musk’s preoccupation with the Trump administration means the broader Tesla team needs to step it up. Only three people are listed as managers on Tesla’s investor relations page: Musk, new senior vice president of automotive Tom Zhu and new CFO Vaibhav Taneja.

If not, the stock could be punished on signs that execution isn’t top-notch enough to justify Tesla’s sky-high valuation.

“It remains to be seen if this (Tesla) team can prove itself,” Gerber said. “The old team at Tesla, who I knew well, were very capable, but they were all let go in the last year. So a whole new team has taken the reins here, and 2025 will be their year to prove if they can deliver, because they have a lot of things to deliver in the next 12 to 18 months.”

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Gerber is a longtime Tesla shareholder and was once an ardent supporter of the company.

However, he began cutting his stake in Tesla in 2023 due to valuation issues and Musk risks. Tesla is now just under 2% of his firm’s portfolio.

Gerber believes Tesla’s fair value is around $200 per share, or 52% below current price levels. The average sell-side price target on Tesla is $283, according to Yahoo Finance data.

However, Musk and Tesla still have their supporters on Wall Street.

At the Yahoo Finance Invest conference, Nuveen’s chief investment officer Saira Malik said the world’s continued transition to renewable energy and Musk’s relationship with Trump were two catalysts for Tesla.

“In the long term, it has a lot of growth ahead of it,” she said.

And Wedbush analyst Dan Ives made Tesla his top pick for 2025.

“I think by 2026 you’re going to see cybercabs,” Ives said on Yahoo Finance’s Opening Bid podcast (listen below). “Tesla is not a car company. More and more, it will not be valued as a traditional electric car maker. This is about the autonomous future. We think the autonomous (industry) alone is worth a trillion dollars.”

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Brian Sozzi is Yahoo Finance’s managing editor. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations or something else? Email [email protected].

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