Two top Tesla investors are taking aim at CEO Elon Musk, one saying he must pull back from his work for the Trump administration, the other saying the damage is done and that it’s time for the automaker to find a new chief executive. Things grew worse for the automaker Thursday as its flagship Cybertruck faced its eighth recall in little more than a year. Headlight.News has more.
“The moment of truth” has come for Tesla and Musk, said long-time bull Dan Ives, of Wedbush.
Two top Tesla “bulls” have issued ultimatums aimed at increasingly embattled CEO Elon Musk.
The South African-born executive has largely ignored critics of his outspoken political shift to the right, as well as his controversial role as head of the Trump administration’s Department of Government Efficiency, or DOGE. But Dan Ives, the managing director at securities firm Wedbush, said Tesla has reached “a moment of truth,” that requires Musk to decide whether to work for Trump or Tesla.
For his part, Ross Gerber, who heads Kawasaki Wealth Management, suggested the moment has come and gone. “I think Tesla needs a new CEO and I decided today I was going to start saying it,” said Gerber.
The walls are closing in on Tesla and Musk
Adding to Tesla’s woes: yet another recall of the tarnished flagship Cybertruck.
Tesla and its CEO appeared to be in an ideal position following the re-election of Donald Trump last November. The automaker’s stock surged to a 52-week high of $488.54 in mid-December. But the bottom began to fall out even before the inauguration. Tesla shares, traded on NASDAQ under the ticker TSLA, have now fallen for eight consecutive weeks and, after a brief, upward surge on Thursday, again tumbled late morning.
A variety of factors are catching blame, including growing competition in the EV sector – especially in the key Chinese market. But the focus is more and more centered on Musk’s political shift and his controversial role with DOGE where he has been responsible for thousands of federal job cuts. He raised new concerns when twice making what was seen as the Nazi “sieg heil” salute during a Trump inauguration event.
Tesla has been facing protests at dealerships across the U.S., as well as vandalism to showrooms and vehicles, with swastikas painted on, or carved into, Cybertrucks and other models.
Backlash spreads abroad
A dozen Teslas were torched at a dealership in France.
The backlash isn’t limited to the U.S., however. A dealership in France had a number of vehicles torched and sales across Europe are down roughly half this year. The number is closer to 75% in Germany, resistance there growing after Musk intervened in recent national elections in favor of the extreme right AfD party.
In Canada, one of Tesla’s larger markets, several members of Parliament have called for 100% tariffs on its products. The city of Toronto ended incentives for Tesla products used in ride-share and taxi fleets. And this week managers of the Vancouver auto show had the company’s stand removed ahead of the event’s opening.
“The Vancouver International Auto Show has removed Tesla as a participant in this week’s event, after the automaker was provided multiple opportunities to voluntarily withdraw,” Eric Nicholl, the show’s executive director, said in a statement.
More Tesla News
- Tesla Recalls Cybertruck for the Eighth Time for Flyaway Body Panels
- Tesla Stock on Track to Lose More Value for 9th Consecutive Week
- The “Musk Effect”
Brand damage
Musk’s apparent Nazi salute, along with his role with Trump’s DOGE, has triggered widespread opposition.
Long a darling of the political left and environmentalists, Musk’s image started to shift with his acquisition of Twitter. He quickly renamed the social media giant “X,” and lifted bans on neo-Nazis and other extremists while espousing ever more conservative views of his own. But the backlash escalated exponential with Musk’s $277 million investment into the Trump presidential campaign and his subsequent role as DOGE chief.
“The brand damage started off as limited in our view based on our initial survey work … but now has spread globally over the last few weeks into what we would characterise as a brand tornado crisis moment for Musk and Tesla,” Wedbush’s Ives wrote in a note to investors.
If anything, what organizers have described as the “Tesla Takedown” is only accelerating. They have announced what is being described as their “biggest day of action,” with plans to launch major protests at more than 500 Tesla dealerships around the world on March 29.
Trump to the defense
During an event on the White House lawn, Trump said he purchased a Tesla to show support for Musk, who has been the subject of mounting protests and a global boycott.
Pres. Trump weighed in on March 11, lending his support to his top lieutenant by staging an event on the White House lawn, ostensibly to announce his own plan to buy a Tesla. But he took things to a new level by effectively turning the news conference into a commercial for the brand, hyping the capabilities of products like the Cybertruck.
“It could be reasonably assumed by some that the White House and the president’s endorsement is up for sale,” William F. Hall, an adjunct professor of political science at Webster University, told ABC News.
Ethical questions again were raised again when Trump’s Treasury Secretary Howard Lutnick, in an interview on Fox News, told viewers to “buy Tesla.” Lutnick, who personally owns Tesla shares hit by the stock’s ongoing decline, further pumped the stock by saying, “It will never be this cheap again.”
“Great difficulty”
Musk, during an appearance on Fox Business, admitted he was having “great difficulty” running his businesses while at DOGE.
Even before he injected himself into politics Musk was stretched thin running an array of companies such as Tesla and SpaceX, as well as other ventures in cybernetics and tunneling. But he made it clear during his appearance on Fox’s “Kudlow” last week that his work at DOGE, among other things, has made things increasingly tough. Asked by host Larry Kudlow about how hard it has come to run his businesses, Musk replied said it is with “great difficulty.”
And while he still has some solid backers, like Cathie Wood, CEO and founder of Ark Invest,” other analysts and investors are turning away. JP Morgan, for one, has slashed its estimates for both Tesla’s sales and its target stock price.
But things took a serious turn for the worse for Musk himself this week. Ives weighed in, warning that Tesla and Musk are facing a “brand tornado crisis moment.” He said it is time for the CEO to step back, if not out entirely, from his work with the Trump administration.
But Gerber sees no way to reverse the damage Tesla has experienced with Musk at the helm, even if he pulls back from DOGE.
“It’s time for somebody (else) to run Tesla,” he told investors.
Whether other lead investors and analysts will follow his lead remains uncertain but with no sign of any immediate rebound in Tesla shares, and with first quarter sales and earnings expected to be far weaker than originally forecast, Musk could find himself increasingly on the outs.
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