Tesla analyst Dan Ives warned investors on Sunday that the company faces a “code red” moment unless Chief Executive Elon Musk walks away from his controversial government activities and turns his attention back to the company.
In a note to Wedbush Securities clients ahead of Tesla’s first‑quarter earnings report on Tuesday, Ives wrote “Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla.” As reported by Bloomberg, Ives added, “Tesla is Musk and Musk is Tesla … and anyone that thinks the brand damage Musk has inflicted is not a real thing, spend some time speaking to car buyers in the US, Europe, and Asia.”
Ives, long known as a Tesla bull, cut his 12‑month price target for the shares by 43% two weeks ago, citing what he called a brand crisis tied to Musk and to President Donald Trump’s trade policies.
He warned that China, which supplied more than a fifth of Tesla’s revenue last year, could retaliate against U.S. tariffs.
Tesla’s 43% slide is tied to Musk’s White House role, Ives warns
“Tesla has unfortunately become a political symbol of the Trump Administration/DOGE,” Ives said. Since Inauguration Day, Tesla’s stock has tumbled 43%, first‑quarter deliveries have disappointed, and street protests against the company have spread, he wrote. The analyst estimated “potentially 15% to 20% permanent demand destruction” among future buyers because of the fallout.
Tuesday’s earnings call is expected to focus on 2025 sales volume, progress on autonomous driving, plans for a robotaxi network, and the profit hit from tariffs. But, Ives said, “looming over everything is Musk’s role in the White House.”
Musk, the world’s richest person, holds the title of special government employee, a temporary post capped at 130 workdays a year. People familiar with the matter told Wedbush that Musk is expected to step back when that limit is reached this year.
Despite the trouble, Ives kept an “outperform” rating on Tesla, calling it “one of the most disruptive technology companies on the globe over the years.” Still, he framed the next weeks as decisive.
“We view this as a fork‑in‑the‑road time,” he 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 CEO. If Musk chooses to stay with the Trump White House, it could change the future of Tesla; brand damage will grow.”
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