Tesla was once the darling of innovation, a bold bet on the future of transportation, technology, and environmental consciousness. But over the past year, the company’s trajectory has shifted, not because of engineering failures or market shifts, but because its CEO, Elon Musk, has chosen politics over performance.
As investment professionals grounded in conservative principles, we believe that companies perform best when they focus on delivering value to shareholders, not on virtue signaling, political crusades, or polarizing public engagement. Whether it’s a corporation funding woke DEI initiatives or a CEO launching a political party from his X account, the outcome is the same: distracted leadership, alienated customers, and declining shareholder returns.
Our conviction is clear: politically active companies pose long-term risks to their shareholders. Political speech from a CEO or senior executive is especially harmful. It is often unclear whether these statements are personal or representative of the company. But in either case, the consequences are real. Customers are alienated, employees feel conflicted, and investors question leadership priorities.
Ironically, the most glaring example of this behavior today isn’t coming from a typical left-leaning S&P 500 firm. It is coming from Tesla, and from Elon Musk himself.
Over the past 18 months, Musk has transformed from an entrepreneurial icon into a political firebrand. While conservatives like us may applaud aspects of his rhetoric, the deeper question is whether his political activism is helping Tesla shareholders. The answer is increasingly clear: it is not.
Let’s start with the numbers. Since February 2025, Tesla stock is down approximately 18 percent and over 40 percent from its December 2024 peak, while the broader market continues to climb to record highs. That is not a minor dip. That is shareholder wealth vanishing in real time.
On July 8, the day Musk announced the formation of his new “America First Party,” Tesla shares dropped more than 5 percent. Coincidence? Hardly. Markets are reacting to a leader who seems more focused on making headlines than hitting production targets. And for Tesla, a company whose innovation is almost singularly driven by Musk’s vision and genius, his attention deficit is especially dangerous.
Tesla is not like many other S&P 500 corporations. It does not have a deep executive bench or a diversified leadership structure. Elon Musk is Tesla. When he is distracted, the company suffers. And right now, he is distracted by campaign rallies, culture war feuds, social media spats, and an apparent desire to build a parallel political movement.
The cost isn’t just financial. It is cultural. Tesla’s core customer base, once composed of left-leaning, climate-conscious consumers, are the kind of people who drove a Prius before EVs were trendy and now are turning sour on Musk. These consumers did not sign up for a company that battles the White House or promotes crypto meme coins. They wanted cutting-edge electric vehicles that reflect their environmental and social values. Musk’s politics have severed that connection.
On the flip side, conservatives initially intrigued by Musk’s anti-woke stance are not exactly rushing to buy Teslas either. The average America First voter is not interested in a seventy-thousand-dollar luxury EV built in California. There is a mismatch between Musk’s political rhetoric and Tesla’s target market. And that mismatch is becoming a business liability.
We have seen this movie before. When companies put politics over performance, shareholders lose. Just ask Disney or Target or Bud Light. But Tesla’s case is more acute because the company’s success hinges almost entirely on Musk’s leadership. His brilliance is undeniable. But so is the damage caused when that brilliance is pointed toward political theater instead of the production line.
To be clear, we are not criticizing Musk for having opinions. Every CEO does. But using Tesla’s platform, implicitly or explicitly, to launch political ventures, antagonize federal regulators, or wage online crusades against perceived enemies? That is not leadership. That is carelessness
Investors should be asking whether this is a car company or a campaign vehicle. Because right now, Tesla looks more like the latter.
In the end, markets reward discipline, not distraction. Shareholders want execution, not electioneering. And while the cult of personality may drive social media clicks, it does not drive long-term value.
It is time for Elon Musk to decide whether he wants to be the next Henry Ford or the next Ross Perot but he shouldn’t be doing it at the expense of his loyal shareholders and investors.
Posted Jul 30, 2025
William Flaig is the CEO and Co-Founder of the American Conservative Values ETF (NYSE: ACVF). Learn more at https://investconservative.com/
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