Wedbush analyst Dan Ives warns that Tesla (NASDAQ:TSLA) is in a “code red situation.” This crisis stems from CEO Elon Musk’s political engagements and his outspoken support for Dogecoin (DOGE). Facing pivotal challenges, Ives urges Musk to redirect focus back to core business operations ahead of the crucial upcoming earnings report.

Brand Damage and Loss of Demand

• Musk as a Political Figure

  • Ives highlights that Musk’s association with the Trump Administration and his vocal support for DOGE have turned Tesla into a “political symbol across the globe.”

• Consumer Reaction

  • Protests are occurring at Tesla stores, and social media campaigns are underway against the company.

  • As a result, Ives estimates a 15-20% permanent loss in demand from potential Tesla customers due to the damage to the brand.

Delivery and Financial Challenges

• Q1 Deliveries Impact

  • Tesla disclosed weaker-than-expected delivery numbers for the first quarter.

  • Forecasts for 2025 deliveries dropped from 2 million to approximately 1.65 million.

• Earnings Outlook

  • Wedbush projects earnings per share (EPS) converging around $2 for 2025, acknowledging possible further downward revisions.

The Path Forward for Tesla

• Return to Core Competencies

  • Ives insists that Musk must step back from politics and limit DOGE-related activities, fully committing to Tesla’s core operations.

• Watch for Earnings Call Insights

  • Investors will eagerly await clarity on:

    1. Full Self-Driving implementation timelines

    2. Rollout of lower-cost vehicles

    3. Roadmap for AI and robotics

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