Staff Reporter
Dan Ives, a seasoned analyst from Wedbush Securities and a long-time supporter of Tesla, is sounding the alarm that the electric vehicle maker is at a critical point. He believes CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE) is stirring controversy among Tesla’s core customer base.
In a report to clients released on Easter Sunday, Ives urged Musk to step back from his duties at DOGE and concentrate fully on Tesla, especially as the company prepares to announce its first-quarter earnings on Tuesday. He described this moment as a “code red” for Tesla, citing brand damage resulting from Musk’s government role.
“Musk needs to leave the government, take a major step back from DOGE, and return to being the full-time CEO of Tesla,” Ives stated. “Tesla is Musk, and Musk is Tesla. Anyone who thinks the brand damage isn’t real should talk to car buyers in the U.S., Europe, and Asia. Their perspectives might change after those conversations.”
Ives recently cut his price target for Tesla’s stock by 43%, linking this to the brand crisis fueled by Musk’s actions and the ongoing trade tensions with China due to former President Trump’s tariff policies.
He is particularly worried that Tesla could be adversely affected by negative sentiment toward these trade policies in a market that provided over 20% of the company’s revenue last year.
Additionally, Musk’s prominence in Trump’s push to downsize the federal government has alienated many left-leaning consumers who are vital to Tesla’s success.
Since January 17, Tesla shares have plummeted by 43%. As the earnings report approaches, the company is expected to address concerns about sales volume for 2025, advancements in autonomous driving, plans for a robotaxi network, and the impact of tariffs on profitability—all while Musk’s role in the White House looms large.
Musk, who is the world’s richest person, is classified as a special government employee, a designation for temporary federal hires limited to 130 workdays per year. Sources indicated that Musk is anticipated to step back from his government role once this period concludes.
Despite these challenges, Ives remains optimistic about Tesla, maintaining an outperform rating and calling it one of the most disruptive technology companies in the world for the years ahead.
