Tesla's major bulls sound the alarm again: Musk needs to leave DOGE

According to the Zhitong Finance APP, Wedbush Securities analyst Dan Ives has once again sounded the alarm for Tesla (TSLA.US), warning that as the electric vehicle manufacturer prepares to announce its first-quarter results on Tuesday, CEO Elon Musk is also facing challenges. In a report on Sunday, Ives stated, "Musk needs to step away from the Trump administration, significantly reduce his involvement with the Department of Government Efficiency (DOGE), and return to being the full-time CEO of Tesla. Tesla is Musk, and Musk is Tesla... Anyone who thinks the damage Musk has done to the brand is not real... should go talk to car buyers in the U.S., Europe, and Asia... After those discussions, you will have a different perspective."

Two weeks ago, Ives lowered Tesla's target price by 43%, citing a brand crisis triggered by Musk and President Donald Trump's trade policies. Ives is most concerned that Tesla may get caught up in China's countermeasures against Trump's tariff policies. The company derived over one-fifth of its revenue from the Chinese market last year. Additionally, Musk has become a spokesperson for Trump's cuts to federal government spending, which has angered Tesla's key customer base—progressive consumers in the U.S.

Ives stated on Sunday, "Unfortunately, Tesla has become a global political symbol of the Trump administration/U.S. government." He then listed several points: Tesla's stock price has significantly declined since Trump's inauguration, the company's first-quarter delivery data is dismal, and protests against Tesla are ongoing. Ives noted, "Due to the brand damage caused by Musk and DOGE, Tesla's future demand could permanently decrease by 15%-20%."

Since January 17, Tesla's stock price has dropped by 43%. When the company reports its earnings on Tuesday, it will face numerous issues, including its 2025 sales targets, progress on autonomous driving, planning for autonomous taxi networks, and how tariffs will impact profitability. Musk's role in the White House casts a shadow over Tesla's prospects.

Ives stated that he remains optimistic about Tesla, maintaining an "outperform" rating and calling it "one of the most disruptive technology companies in the world in the coming years." However, he emphasized that Tesla needs its "most important asset"—Musk—to return to the company full-time.

Ives remarked, "We believe this is a crossroads: If Musk leaves the White House, Tesla's brand image will suffer permanent damage, but the company's most important asset and strategic thinker will return as full-time CEO. If Musk chooses to stay in the Trump administration, it could change Tesla's future/brand image will be further damaged."