Tesla bull Dan Ives says the company has reached a ‘tipping point’ and lays out a 3-point plan for the board to rein in Elon Musk

But that was then. 

Since the call, Musk and Trump have traded sharp insults in an on-and-off again headline-grabbing feud. Over the holiday weekend, it culminated in Musk’s announcement that he would launch a new political party.

While the news may be welcome to some Musk fans, the markets were not so enthusiastic; Tesla shares dropped nearly 7% when markets opened on Monday, a decline that personally cost Musk $68 billion.

Now, the Tesla story has reached “a tipping point,” says Wedbush analyst Dan Ives, a longtime company bull who implored the board to take action to end the “soap opera” in a new note on Tuesday morning. “Tesla is heading into one of the most important stages of its growth cycle with the autonomous and robotics future now on the doorstep and cannot have Musk spending more and more time creating a political party, which will require countless time, energy, and political capital,” he wrote. 

Ives said he fears that having a beef with Trump will cost the company around  $1 trillion opportunity in autonomous vehicles alone. “We believe the board now has to take the bull by the horns,” he wrote. 

Notably, his suggestions did not include banning Musk from political adventures, even though the CEO is already busy running Tesla and SpaceX, while staying actively involved in his other companies, including X and xAI. But Ives did prescribe three steps the board could take to create “ground rules” around Musk’s ambitions. 

Limit the amount of time Musk spends on politics

“Some general guardrails on this front would help everyone involved, including institutional investors, retail investors, Musk himself, the Board, and Tesla employees around the world,” said Ives. 

Set up a new board committee dedicated to Musk’s political party 

All public company boards have special committees dedicated to specific functions, like executive compensation or oversight of cybersecurity risks. Ives believes Tesla should create a special board oversight committee focused only on Musk and his political ambitions. “The Board cannot control Musk’s donations….but they can have oversight if his political ambitions/endeavors interfere with his role as CEO of Tesla,” Ives wrote. 

Give him a bigger stake in Tesla and more voting power

Rather than reduce Musk’s influence at the company, Ives suggests designing a new incentive-driven pay package that would give the CEO a larger share of the company and up to about 25% of the voting power. “This would also create a framework that potentially Musk could drive Tesla to merge with xAI,” he wrote, referring to Musk’s artificial intelligence data company, “and create one of the most powerful AI companies in the world under one roof over the next 12 to 18 months.” Under Ives’ plan, the hypothetical special committee mentioned above would also oversee the pay package and whether Musk has violated its boundaries. 

Tesla did not respond to Fortune’s request for comment.

To say that the car company’s directors have not impressed governance experts would be an understatement. Experts have long accused Tesla’s board of being too cozy with Musk. Directors include Musk’s brother, Kimbal Musk, a restaurateur, and several of Musk’s friends, such as Airbnb co-founder Joe Gebbia. 

Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, for example, recently questioned whether there was such a thing as a tipping point for this board. “Over the years, Musk’s behavior has become more outrageous,” Elson said. “The board’s lack of response makes you wonder, ‘Who are these people? Why are they there?’” 

“There have been so many ‘Now the board has to do something moments,’ and they have failed every time,” Nell Minow, a corporate governance expert and vice chair of ValueEdge Advisors, also said. “I no longer feel that there is such a thing as ‘Now they have to do something.’”