Elon Musk is Tesla (TSLA) CEO in title only nowadays and is keener on wielding power in the incoming Trump administration, one outspoken investor in the electric vehicle maker contended.
“[Elon Musk] certainly is setting the direction and the tone of the business and overseeing the senior executives that are in charge of all the different projects, but in the traditional sense of running a company, like what’s going on in Nvidia [and CEO Jensen Huang], no, I mean, he’s not at all,” Gerber Kawasaki Wealth and Investment Management president Ross Gerber said on Yahoo Finance’s Catalysts (video above).
“I think Tesla shareholders are more than aware that their CEO works 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 to Trump’s and other Republicans’ campaigns.
For his public support, Trump awarded Musk a role in his administration alongside another ardent supporter, Vivek Ramaswamy, as the head of a newly created Department of Government Efficiency (DOGE).
Musk has been spending considerable time at Trump’s Mar-a-Lago resort, meeting with world leaders and advising Trump. He even interjected himself into a contentious debt ceiling debate this month, which almost led to a government shutdown.
Read more: How a government shutdown would impact your student loans, Social Security, investments, and more
Nevertheless, the market has rallied since Trump’s November presidential win, particularly sectors that are seen as beneficiaries of his policies. Though the president-elect has not been a fan of green energy and may withdraw the $7,500 EV credit created under the Biden administration, Tesla may be in a favorable position due to its CEO’s connection with Trump.
Tesla shares have rocketed 74% since Election Day, dusting the S&P 500’s nearly 5% gain.
Gerber believes 2025 will prove critical for Tesla and Musk’s preoccupation with the Trump administration means the wider Tesla team must step it up. Only three people are listed as executive team members on Tesla’s investor relations page: Musk, new senior automotive vice president Tom Zhu, and new CFO Vaibhav Taneja.
If not, the stock could be penalized amid signs that execution isn’t first-rate enough to justify Tesla’s heady valuation.
“It’s yet to be seen whether this [Tesla] team can prove themselves,” Gerber said. “The old team at Tesla, which I knew very well, was very capable, but they were all let go in the last year. So a whole new team has taken the reins here, and 2025 is going to be their year to prove if they can deliver because they got a lot of stuff to deliver in the next 12 to 18 months.”
