Wedbush Securities analyst Dan Ives has raised concerns about the leadership direction at Tesla Inc., suggesting CEO Elon Musk should step back from political affiliations and his public promotion of Dogecoin (DOGE) to refocus on his core role at the electric vehicle maker.
The remarks come ahead of Tesla’s first-quarter earnings report, expected on Tuesday.
In a note to clients on Sunday, Ives reiterated his bullish long-term view of Tesla but warned that the company’s brand is increasingly at risk due to Musk’s high-profile political involvement and association with cryptocurrency.
“Tesla is Musk and Musk is Tesla,” Ives wrote.
He cautioned that brand sentiment among car buyers in key markets such as the US, Europe, and Asia has been impacted.
Tesla shares have declined 43% since January 17, with Ives attributing part of the downturn to a perceived brand crisis. Two weeks ago, he reduced his price target for Tesla by 43%, citing growing consumer backlash and geopolitical risks, particularly in China, where Tesla derives more than 20% of its revenue. The company is also facing protests and weaker delivery numbers for the first quarter.
Ives expressed concern that Tesla has become a “political symbol” associated with the Trump administration and DOGE, which he believes could lead to long-term damage to the brand. According to Ives, this may result in a 15% to 20% decline in potential future demand, especially among progressive consumers who have historically supported Tesla’s mission.
Despite these concerns, Ives maintained an “outperform” rating on Tesla and continued to describe it as one of the most disruptive technology companies globally. However, he emphasized the importance of Musk returning his full attention to Tesla’s leadership as the company faces a critical juncture.
Tesla’s upcoming earnings call is expected to address a range of topics including vehicle delivery forecasts for 2025, progress in autonomous driving technology, and plans for a potential robotaxi network. Analysts will also be watching for commentary on how tariffs and trade policies may affect the company’s profitability.
As debate intensifies around Musk’s dual focus on political engagements and Tesla’s operational leadership, Ives warned that further entrenchment in political activities could increase brand risk. He framed the situation as a pivotal moment:
“If Musk chooses to stay with the Trump White House, it could change the future of Tesla,” he wrote. “If he returns to Tesla full time, the company can refocus on innovation and execution.”
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