Tesla is heading into a pivotal earnings week with mounting pressure on CEO Elon Musk to refocus on the company’s core business and distance himself from political distractions, according to a new research published by Wedbush Securities on Sunday.
The firm’s analyst Dan Ives urged Musk to return to Tesla as “full time CEO” as the company faces “major crossroads” amid deepening brand damage linked to his ties to the Trump Administration and his continued involvement with the Efficiency Department ‘DOGE’.
“We view this as a fork in the road time: 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 to drive the vision and the long term story will not be altered,” Wedbush analyst Dan Ives wrote 48 hours before Tesla’s earnings call scheduled for Tuesday.
As of the time of writing, Tesla shares are trading 3.8% lower at $232 during Monday’s pre-market trading. Despite the stock price has surged 61% over the past 12 months, shares have lost 40% of its value year to date.
Wedbush cited multiple concerns dragging on Tesla’s stock performance and investor confidence, including weak first-quarter deliveries, escalating trade tariffs, and a politicization of the brand. “Tesla has now unfortunately become a political symbol globally of the Trump Administration/DOGE,” the note said.
The firm noted a “terrible 1Q delivery number with much lower 2025 deliveries on the horizon,” and warned of “potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE.”
Additionally, Ives recalled Reuters report which claimed that production of Tesla’s affordable model “has been delayed” and won’t be launched in the first half of the year as initially announced by the Elon Musk-led company.
The report, which cited three unnamed sources, said Tesla was targeting to produce 250,000 units of its affordable model next year in the United States.
Despite the challenges, Wedbush remains bullish on Tesla’s long-term innovation pipeline, calling the company—along with Nvidia Corp.—one of “the most disruptive technology companies on the globe over the coming years.”
But the analyst issued a clear call to action for Musk: “Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time.”
Tesla shares have faced increased volatility since President Donald Trump reentered the White House, with some investors concerned that Musk’s association with the administration could weigh on international sentiment and consumer demand.
“Musk is Tesla and Tesla is Musk….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…you will think differently after those discussions,” Wedbush wrote.
Looking ahead to Tuesday’s earnings call, analysts at the firm say clarity on product milestones is critical. “On the call Tuesday Musk needs to lay out for investors the timing/rollout of unsupervised FSD in Austin this summer, when does the new lower cost vehicle hit the production line and does it depend on tariff relief, how will Tesla pivot and turn the growth story for 2025 in a positive direction after a disastrous 1Q, and it’s time to lay out the timeline/hard facts around autonomous and robotics/Optimus rollout over the next 6-12 months,” the note said.
Tesla is expected to report earnings per share of around $2, with forecasts already lowered for 2025 deliveries to about 1.65 million units.
Barclays x Tesla
Last Friday, Barclays trimmed its price target on Tesla to $275.00 from $325.00. The bank said the company has a “confusing set-up” in the first three months of the year with “weak fundamentals.”
Tesla delivered 336,700 vehicles in the first quarter, down 12.9% from the same period last year. Production also fell 16% to just over 360,000 units, as the EV maker shifted to the production of its refreshed Model Y.
Ahead of the earnings results, Tesla used Say Technologies platform to garner questions from retail and institutional shareholders. As of Friday, over 2,580 questions were submitted with the most voted ones focusing on the robotaxi, the unboxed method for the model, and progress on the Full Self-Driving (FSD) software.
