Wedbush analyst Dan Ives warns that Tesla (TSLA) stock faces a “Code Red” if CEO Elon Musk can’t choose between his duties for Tesla and serving US President Donald Trump. Musk has faced scrutiny both in his time as Tesla’s CEO and the head of the US Department of Government Efficiency (D.O.G.E). Ives warned that the EV maker faces a “code red” if Musk doesn’t step back from his government role ahead of Tesla’s next earnings report.
“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. Last month, Ives also warned that Tesla faces a “brand crisis tornado” after Tesla’s stock price saw a steep fall. Wedbush’s analysts also cut their 12-month price target for Tesla stock from $550 to $315 last week.
Additionally, Ives added 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.”
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Other analysts have also called on Elon Musk to choose a role and stick to it, saying that it could continue hindering Tesla (TSLA) stock. Dan Ives says that Musk’s work at DOGE hurts demand for Tesla’s EVs and fuelling protests and vandalism, citing it as the cause of Tesla’s disappointing first-quarter deliveries. Tesla has had a difficult few weeks, with first-quarter sales coming in way under expectations and the automaker’s stock price also falling 40% this year.
Tesla’s earnings call is scheduled for April 22, and Wall Street is closely watching the developments. The Q1 earnings call delivered poor results with a decline in production, sales, and revenues. The next earnings call could determine where TSLA stock goes from here, and perhaps if Musk will put more time into the EV maker instead of government work. If things don’t turn around, Tesla stock could face another round of sell-offs, making its price plummet in the charts. There is a high chance TSLA could fall to the $220 to $200 range if the earnings call disappoints this time.
