Elon Musk Has a Big Problem at Tesla, and Wall Street's Biggest Bull is Not Happy About It

Wedbush analyst Dan Ives has intensified his criticism of Elon Musk’s leadership at Tesla Inc., asserting that the CEO must take decisive action to halt the company's stock decline.

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Tesla’s Struggles and Stock Performance

Tesla’s stock has plunged 41.6% this year through Wednesday, making it the biggest loser in the S&P 500. The company faces declining demand, mounting competition, and public backlash over Musk’s involvement in the Trump administration.

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On Thursday, Tesla shares dropped 1.3% in premarket trading, putting the stock on track for a record-breaking nine-week losing streak.

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Despite these challenges, Ives has maintained his outperform rating on Tesla, though he believes the company’s future hinges on Musk making significant changes. Ives, who has consistently been bullish on Tesla, holds Wall Street’s highest price target for the stock at $550, suggesting a 133% upside from Wednesday’s closing price of $235.86.

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However, Ives warned that Tesla is at a critical juncture, as Musk’s focus has shifted toward his work with Washington’s Department of Government Efficiency (DOGE).

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Ives: Musk Must Make Two Major Moves

“This is a defining moment for Musk, and he is the only one who can fix it,” Ives wrote in a client note. He outlined two key steps that Musk must take to prevent Tesla’s current struggles from snowballing into a major crisis for the brand.

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Musk Must Reaffirm His Commitment to Tesla

1. Ives suggested that investors need reassurance that Musk remains dedicated to Tesla, even as he balances his DOGE responsibilities.
2. A formal announcement should be made either before or during the company’s next quarterly update in May to clarify Musk’s role.
3. “Investors need to see Musk step back and find a balance between his DOGE commitments and his Tesla CEO duties,” Ives said. If he does this, the political heat surrounding DOGE will likely subside.

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Tesla Needs a Clear Strategy for Future Products

1. Musk must provide a detailed timeline for the 2025 launch of Tesla’s lower-cost vehicles.
2. He should also offer specifics on the full-self-driving (FSD) rollout expected in June.
3. A well-defined road map will help restore investor confidence and signal that Tesla remains on track with its innovation plans.

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Ives' Growing Frustration with Musk

Ives’ critique of Tesla has escalated in recent weeks. On March 11, he urged Musk to "step up" and improve the company’s performance. Now, he has taken a firmer stance, making it clear that his continued support for the stock depends on Musk addressing the brand damage he has caused.

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For years, Ives has repeatedly defended Tesla, but he now insists that Musk must take action if the company is to recover.

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Musk’s political involvement has contributed to Tesla’s struggles. His ties to DOGE, public support for Europe’s far right, and Tesla-related protests have led to allegations of vandalism, confrontations between protesters and Tesla owners, and overall negative sentiment surrounding the brand.

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Sensing an opportunity, Polestar, a rival EV manufacturer, has introduced a $5,000 “conquest bonus” for Tesla owners who switch to leasing a Polestar vehicle. This move underscores the growing competition in the EV market, as other automakers capitalize on Tesla’s recent missteps.

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