One of the biggest Tesla (TSLA) bulls on Wall Street says it’s time for Elon Musk to change the narrative about his EV maker.

With Tesla set to report earnings on Tuesday after the ball amid slumping sales and a cratering stock, Wedbush Securities analyst Dan Ives said Musk’s latest “turnaround vision” must begin with Musk’s earnings call.

Ticking off the slew of setbacks Tesla has faced this year — from becoming “a political symbol” and brand damage to “protests and violence against Tesla dealerships” and new tariffs — Ives said “we are now at a major crossroads for the Tesla story.”

“So why stay bullish? It’s a great question,” Ives wrote in a Sunday note. “We believe Tesla along with Nvidia (NVDA) are two of the most disruptive technology companies on the globe over the coming years. The unparalleled innovation, engineering scale, autonomous roadmap, and robotics future will unleash massive valuation upside over the coming years in our view.

From earlier this year: Elon Musk is distracted. Tesla stock is cratering. Some investors want a change

But Ives also said it’s time for Musk to leave his position in the Trump administration leading the Department of Government Efficiency, or DOGE. Wedbush said Musk faces a “Code Red Situation” if he stays at DOGE.

“Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Ives said. “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 U.S., Europe, and Asia. You will think differently after those discussions.”

“We view this as a fork in the road time,” Ives 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 full time CEO to drive the vision and the long term story will not be altered. If Musk chooses to stay with the Trump White House it could change the future of Tesla/brand damage will grow.

Wedbush still maintained its Outperform rating on Tesla stock. The shares are down about 36% so far this year.

Tesla is no longer selling the majority of electric cars registered in America’s biggest electric vehicle market. The automaker has lost significant ground in California, which accounts for almost a third of all zero-emission purchases in the country

According to a publication sponsored by the California New Car Dealers Association (CNCDA), Tesla’s share of the state’s EV market fell to 43.9% in the first quarter of this year from 55.5% a year ago. Tesla registrations in the first quarter of 2025 fell over 15% from a year earlier — while registrations for all other EVs increased by 35%.

Musk was a major supporter of Trump during his presidential campaign and transitioned into becoming a senior White House adviser after Trump’s inauguration. He now leads DOGE, which pushes federal agencies to issue mass layoffs and enact other spending cuts, and has frequently weighed in on foreign politics.

Protests have been organized at Tesla showrooms and facilities across the country since Trump was inaugurated in January. Many peaceful demonstrations have taken place, including a slew of protests held on Sunday, such as a 300-person rally held at a Tesla showroom in Boston and another at a showroom in Vancouver, Washington.

But more than a dozen violent or destructive acts have been directed at the company’s facilities since the inauguration, according to The Washington Post, including one instance where an individual planted a Molotov cocktail near a vehicle. There have also been several reports of individual vehicles or Superchargers being vandalized.

—Shannon Carroll and William Gavin contributed to this article.

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