Morningstar

Tesla: Shares Rally on Report that Elon Musk Plans to Reduce Advisory Role in US Government

Musk will remain in a supporting role, but will spend more time running his businesses.

Ladegerät mit Tesla-Logo an einer Supercharger-Schnellladestation für das Elektrofahrzeugunternehmen Tesla Motors.
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Securities in This Article
Tesla Inc
(TSLA)

Morningstar’s Metrics for Tesla

Politico reports that Tesla TSLA CEO Elon Musk will be stepping back from his current role as a close advisor to US President Donald Trump. Musk will remain in a supporting role, but will spend more time running his businesses. Tesla shares were up 5% at the time of writing on the news.

Why it matters: Since Trump took office in January, Musk has taken a visible role in the government, advising the president and overseeing the Department of Government Efficiency’s aim to reduce federal government spending.

  • The market may have questioned if Musk was distracted from his role at Tesla. This is a crucial time, as first-quarter deliveries fell 13% year over year and the firm aims to begin testing its robotaxi service.

The bottom line: We maintain our $250 fair value estimate for narrow-moat Tesla, as we see no reason to change our outlook for the company. At current prices, we view Tesla shares as fairly valued, with the stock trading slightly above our fair value estimate but in 3-star territory.

  • Despite Musk’s advisory role to Trump, we thought he would still have enough time to devote to Tesla, leading key initiatives such as the company’s autonomous driving software development, which is needed for robotaxis.
  • Last month, Musk held a publicly streamed meeting to reinforce his commitment to leading Tesla and discuss the company’s strategy. We thought the meeting was adequate to signal his leadership.

Coming up: Deliveries will a key catalyst for Tesla’s stock in the coming quarters. We attribute its first-quarter deliveries decline to consumers waiting for new models, including the Model Y, which is now available, and a more affordable vehicle which is set to launch later this year.

  • If deliveries return to year-over-year growth, shares could rally as the market anticipates a return to growth in 2026. However, if deliveries continue to fall, it could weigh on shares.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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