Elon Musk is coming under growing pressure to choose between Tesla and DOGE, after the automaker’s terrible start to the year.
Tesla investors are increasingly restless ahead of a critical earnings report on Tuesday, with one prominent analyst saying the company faces a “code-red situation” if Musk stays at DOGE.
“Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Wedbush Securities analyst and major Tesla bull Dan Ives said in a note on Sunday.
Ives has been one of Musk’s outspoken supporters in recent years, but this is not the first time he has called on the billionaire to step back from his DOGE work.
Last month, Ives warned that the automaker faced a “brand crisis tornado” after Tesla’s stock price plunged on the back of collapsing sales and a wave of protests against Musk.
Wedbush cut its 12-month price target for Tesla stock from $550 to $315 last week, with Ives writing in a note that the company had become a “political symbol.”
Tesla has had a difficult few weeks, with first-quarter sales coming in way under expectations and the automaker’s stock price plunging 40% this year.
In a forum for shareholders to submit questions for Tesla’s first-quarter earnings call on Tuesday, some investors asked whether the company expects to be hit by Trump’s tariff barrage, or “brand damage” as a result of Musk’s foray into politics.
“Is the Tesla board discussing whether their CEO should focus fully on Tesla and leave government to elected politicians?” one retail shareholder asked.
Others asked for more details about Tesla’s upcoming robotaxi launch and the company’s planned affordable electric car.
Reuters reported last week that the long-rumored cheaper EV, which Tesla said would launch in the first half of 2025, has been delayed by several months.
Ives said he remained bullish on Tesla in his Sunday note, pointing to Musk’s history of innovation and the company’s AI and robotics roadmap as reasons for optimism.
However, he said that Musk’s work at DOGE was hurting demand for Tesla’s EVs and fuelling protests and vandalism, citing it as the cause of Tesla’s disappointing first-quarter deliveries.
Ives also said that Musk would need to steady the ship in Tesla’s earnings call by confirming the rollout of the company’s robotaxi service in Austin for this summer, providing more details about Tesla’s lower-cost vehicles and Optimus robots, and addressing the uproar around his government role.
“We view this as a fork in the road time,” Ives wrote. “If Musk leaves the White House there will be permanent brand damage…but Tesla will have its most important asset and strategic thinker back as full time CEO.”
Musk and Tesla did not respond to a request for comment, sent outside normal working hours.
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