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Investing.com -- Tesla (NASDAQ:TSLA) and its CEO Elon Musk are “facing a defining chapter in their future,” Wedbush analyst Daniel Ives said, as the electric vehicle (EV) maker undergoes a growing crisis that could have long-term ramifications.
“Tesla is going through a crisis and there is one person who can fix it....Musk,” Ives said.
According to the analyst, the root of the issue is Musk’s overwhelming focus on Department of Government Efficiency (DOGE).
Since President Trump returned to the White House, Musk has spent “110% of his time with DOGE (and not as Tesla CEO),” creating a situation where Tesla has turned “into a political symbol.”
“And this is a bad thing,” Ives stressed.
What started as a limited issue has now escalated into what Ives describes as a “brand tornado crisis moment.”
Reports of violence at Tesla dealerships, cars being vandalized in parking lots, and social movements forming against Musk have compounded the problem. While Trump’s recent purchase of a Tesla at a White House event created political spectacle, Wedbush warns it does not solve the brand’s underlying demand issues.
To reverse the damage, Ives highlights two key steps Musk must take.
First, he needs to formally announce that he will balance his responsibilities between DOGE and Tesla. Investors need to hear him commit to the company, with Wedbush expecting a statement “either before or during the 1Q earnings conference call in early May.”
If Musk takes a step back from DOGE and reaffirms his leadership at Tesla, Ives believes it could stop the situation from spiraling further, limiting the long-term impact on the brand.
The second move is providing a concrete timeline for Tesla’s next phase of growth. This includes launching the lower-cost vehicle in 2025 and rolling out unsupervised Full Self-Driving (FSD) in Austin in June.
“With a Model Y refresh, inventory issues, and a host of demand issues with Musk brand damage a worry...there is one person Tesla investors need to hear from...Musk,” Ives continued.