MW Tesla has a big Musk problem, and Wall Street's biggest bull is not happy

By Steve Gelsi

Wedbush's Dan Ives says CEO Elon Musk faces a 'moment of truth,' and there two major things he has to do to fix the 'crisis' at the EV giant

Wedbush analyst Dan Ives sharpened his criticism of how Elon Musk is running Tesla Inc., saying the electric-vehicle giant's chief executive needs to make two major moves to stop the stock's free fall this year.

Tesla's stock $(TSLA)$ is down 41.6% this year through Wednesday - it's the S&P 500 index's SPX biggest loser over that time - amid slowing demand and increasing competition, and public outcry over Musk's role in the Trump administration.

The stock fell 1.3% in premarket trading Thursday, and was on track to suffer a record-long nine-week losing streak.

Ives stuck to his outperform rating on the stock, but said the future of the EV maker depends on a major change of course from Musk.

Ives has long been a bull on Tesla, holding the highest stock price target among Wall Street analysts at $550. That implies a 133% upside to Wednesday's closing price of $235.86.

But Tesla and Musk now face a "defining chapter" as Musk's attention has been diverted by his work with the Department of Government Efficiency (DOGE) in Washington, Ives said.

"Let's call it like it is: Tesla is going through a crisis and there is one person who can fix it ... Musk," Ives wrote in a note to clients.

"This is a moment of truth for Musk and there are 2 things Elon needs to do to end this crisis and make sure it does not snowball into a much more black swan event for the Tesla brand over the coming years," Ives added.

Acting somewhat like an activist investor, Ives said Musk must make a formal announcement that he will continue to focus on Tesla - as well as DOGE - either before or during the company's next quarterly update in May, Ives said.

"Investors need to see Musk take a step back and balance his DOGE and Tesla CEO roles," Ives said. "If he does this the heat from Musk around DOGE will start to dissipate among most of the critics."

Second, Musk needs to provide a road map and timing for the 2025 release of its new lower-cost vehicles, as well as details around its full-self-driving car launch in June, he said.

Ives' commentary on Tesla has grown sharper compared with his comments on March 11, when Ives said Musk must "step up" to improve the performance of the company.

Basically, Ives said for him to keep defending the stock like he has "again and again over the years," Musk needs to repair the damage he has inflicted on the brand.

Also read: Here's who should be buying Tesla's stock right now, and why, says analyst.

Musk's involvement with DOGE and other aspects of the political sphere, including voicing support for the far right in Europe, has been followed by protests at Tesla facilities, allegations of vandalization of Tesla vehicles and reports of altercations between protesters and Tesla owners.

Sensing a market opportunity, rival EV maker Polestar $(PSNY)$ is offering a $5,000 "conquest bonus" for Tesla owners to lease a Polestar vehicle.

-Steve Gelsi

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March 20, 2025 08:27 ET (12:27 GMT)

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