The “Musk Premium” Still Defines Tesla

Wedbush Securities veteran Dan Ives has long championed Tesla, giving it the highest price targets on Wall Street—sometimes as high as $550—even amid turbulence . Despite broad criticism over Musk’s political entanglements, Ives recently reinforced his steadfast belief in the CEO’s irreplaceable importance, stating: “Musk is Tesla’s most important asset” 

This “Musk premium” reflects a conviction that his unique vision—spanning electric vehicles, AI-driven autonomy, robotics, and energy—remains deeply interwoven with Tesla’s identity and future.

Code-Red: A Leadership Wake-Up Call

Earlier this year, Ives issued a stark warning. With Musk heavily involved in the Trump administration’s “Department of Government Efficiency (DOGE),” Tesla faced what he called a “code-red situation”, marked by protests, slide in global sales, and a precipitous stock drop—even as deliveries cratered by over 40% YTD 

He underscored the urgency for Musk to pivot back: “Tesla’s future depends on it” .

A Strategic Rebound: Musk Refocuses on Core

Following his warning, Musk responded with a decisive shift. He refocused on Tesla by returning to office, leading live all-hands meetings, and prioritizing product roadmaps over political commitments . This pivot resulted in a modest rebound in the stock and earned Ives’ commendation as a positive sign.

 Why Musk’s Vision Still Drives Tesla’s Upside

Wedbush outlines three transformational pillars that anchor Musk’s asset status:

A. Autonomous Future & Robotaxis

Tesla’s robo-taxi pilot in Austin stands out as a critical turning point, targeting full rollout by late 2026 

Ives quantified the potential, describing autonomy and robotics as worth 90% of Tesla’s future valuation 

B. AI & Full Self‑Driving (FSD)

Tesla’s data-driven FSD is a core AI play, and Wedbush deems it the “most undervalued AI play in the market” 

With FSD adoption expected to exceed 50%, it could transform Tesla’s margins and elevate valuation well beyond current levels 

C. Affordable EV & Optimus Robots

Musk’s promise of a <$25K Tesla model is considered mission-critical. Ives emphasizes it as foundational to long-term volume growthOptimus humanoid robots, with mass production anticipated in 2026, represent another bold bet underpinning future returns

Numbers & Targets: The Bullish Case

Despite Q2 vehicle deliveries declining 13–15%, Tesla remains cash-rich ($37B) and active in robotaxi and AI initiatives

Wedbush has repeatedly raised its Tesla price target—$500 in May 2025, up from $350—calling autonomy a “massive stage of valuation creation” Though acknowledging recent turbulence and Musk’s distractions, Ives maintained an “Outperform” rating, citing mid-/long-term upside of 50–100% .

 Balancing Act: Politics vs. Performance

Ives doesn’t dismiss Musk’s political activity—it’s a genuine risk. He urged Musk to step back from DOGE and focus on Tesla to prevent brand erosion and operational distractions 

By refocusing, Musk demonstrated both accountability and awareness, calming investors who feared Musk’s divided attention was harming Tesla.

 Still a “Gut‑Check Moment”

Wedbush labels this a pivotal juncture for Tesla. Musk’s renewed hands‑on leadership helped mitigate fears, but execution remains essential: proof of scalable autonomy, volume EV, and robotics.

Ives emphasizes that without it, the Musk premium could evaporate—turning his greatest asset into a liability.

Risks and Uncertainties

Execution delays could derail investor expectations. Musk’s timelines—especially on autonomy and robotics—haven’t always been met.

Policy shifts, including the loss of U.S. EV tax credits and geopolitical tariffs, can hit sales and margins

Competition from legacy automakers and AI-driven startups represents growing pressure on price and market share.

The Verdict: Musk Remains Indispensable

In Wedbush’s eyes, Tesla without Musk is unthinkable. The “robotaxi, AI, Optimus trifecta” is inextricably linked to his vision and leadership

Removing Musk—or see-sawing into politics again—would likely strip Tesla of its premium valuation and hyper-growth narrative.

The Path Ahead: Watch for Execution

Key milestones in the coming months will test Musk’s renewed focus and Tesla’s trajectory:

Q3–Q4 deliveries of the affordable EV model.

Robotaxi pilot expansion beyond Austin.

Progress on FSD and Optimus scaling.

Calm in Musk’s political engagement and renewed product discipline.

If Musk delivers on these fronts, Wedbush projects Tesla could reach a $2 trillion market cap by end-2026

Conclusion

Dan Ives’ analysis is clear: Elon Musk is Tesla’s most vital asset—but only if he remains fully committed. His visionary leadership fuels investor optimism, but past distractions and public controversies have exacted real cost.

Tesla’s next act hinges on Musk’s ability to reconcile ambition with focus. If he can, the payoff could be transformative. If not, the Musk premium may prove ephemeral—and Tesla’s valuation could follow.