Tesla is facing a critical juncture, with Wedbush Securities analyst Dan Ives issuing a “code red” warning for the company. Ives, a long-time Tesla supporter, expressed concerns over CEO Elon Musk’s involvement in political activities, particularly his advisory role in the Trump administration and association with the Department of Government Efficiency (DOGE). This political engagement has, according to Ives, transformed Tesla into a global political symbol, leading to brand damage, declining sales, and a significant drop in stock value.
Ives highlighted that Tesla’s first-quarter deliveries were below expectations, and projections for 2025 deliveries have been reduced from 2 million to approximately 1.65 million units. Earnings per share estimates have also been lowered to around $2. The analyst emphasized that Musk’s political affiliations are contributing to a potential 15%-20% permanent demand destruction for future Tesla buyers.
Despite these challenges, Ives remains optimistic about Tesla’s long-term prospects, citing its advancements in AI, robotics, and the anticipated rollout of robotaxis and lower-cost vehicles. However, he stressed that Musk needs to refocus on Tesla’s core business and distance himself from political endeavors to restore investor confidence and stabilize the company’s trajectory.
