As Elon Musk Opts for ‘Politics Instead of Humanoids’ Jim Cramer Says It’s Hard to ‘Pull the Trigger’ on TSLA Stock

CNBC guru Jim Cramer’s reluctance to recommend Tesla (TSLA) stock despite its beaten-down valuation reflects growing investor frustration with CEO Elon Musk’s political entanglements overshadowing the company’s technological innovations. The “Mad Money” host criticized Musk’s focus on “politics instead of humanoids,” highlighting how political distractions are derailing Tesla’s core mission.

Tesla stock has faced selling pressure following Musk’s announcement that he was forming the “America Party,” a new political venture targeting select Senate and House of Representatives races. TSLA stock plummeted nearly 7% in a single trading session earlier this month, erasing over $68 billion in market value as investors expressed concern about Musk’s divided attention during a crucial period for the electric vehicle company.

The situation deteriorated further when President Donald Trump threatened to cut government subsidies for Musk’s companies, suggesting the Department of Government Efficiency (DOGE) should investigate the billionaire’s extensive government support. Trump’s comments that Musk could “lose a lot more than that” sparked additional selling pressure for TSLA stock.

Musk’s criticism of the administration’s tax-and-spending bill has reignited tensions with Trump, who previously praised the Tesla CEO’s early political involvement. The One Big Beautiful Bill Act, which eliminates EV tax credits and reduces support for renewable energy, poses a direct threat to Tesla’s business model.

Tesla’s vulnerability to government policy changes extends beyond vehicle sales. The EV giant has generated more than $11 billion in revenue on automotive regulatory credits since 2015. SpaceX, another Musk venture, holds $22 billion worth of federal contracts, highlighting the extensive government relationships at stake.

Tesla also faces operational challenges with second-quarter deliveries down 13.5% year-over-year. Rising competition, particularly in China, exacerbates these difficulties, as Musk’s attention is divided between corporate leadership and political activism.

Wedbush analyst Dan Ives captured investor sentiment, noting “a broader sense of exhaustion from many Tesla investors that Musk keeps heading down the political track.” While Cramer acknowledges Tesla’s valuation creates a potential “price break” opportunity, the ongoing political drama makes it difficult for even seasoned investors to confidently recommend the stock.