Tesla and Elon Musk are in the midst of a “brand tornado crisis moment,” with calls for the electric carmaker’s CEO to reduce his involvement with Donald Trump to mitigate the fallout, as stated by one of the company’s most prominent supporters.
This warning follows Tesla’s announcement of a recall for 46,000 Cybertrucks in the US on Thursday, aimed at addressing an exterior panel issue that might detach while driving.
Additionally, protesters revealed on Wednesday that they are organizing their largest action yet against the EV manufacturer, expecting 500 demonstrations at Tesla showrooms globally on March 29.
In the past month, Tesla shares have decreased by a third due to several investor worries, including concerns about sales impacts from Musk’s prominent engagement with the Trump administration, particularly through his controversial “department of government efficiency” (Doge).
Dan Ives, managing director at Wedbush and a self-identified Tesla “core bull,” expressed that Musk’s role in leading Doge is harming both Musk’s personal reputation and Tesla’s business.
“Initially, we viewed the brand damage as limited based on our preliminary survey work, but it has now escalated globally into what we categorize as a brand tornado crisis moment for Musk and Tesla,” Ives noted in a message to investors.
Musk has made significant cuts to jobs and expenditures in his role, although a US judge ruled this past Tuesday that Musk and Doge probably violated the US Constitution by shutting down the US Agency for International Development.
Ives pointed to protests at Tesla locations, instances of vehicle vandalism, and global demonstrations as indicative of a “massive overhang for Tesla’s stock.” He emphasized that Musk is at a “moment of truth” and must take action.
“Tesla and Musk are encountering a defining chapter in their journey, and how Musk navigates the upcoming months will be crucial for Tesla’s long-term growth trajectory. Tesla is Musk, and Musk is Tesla; they are inseparably linked,” he emphasized.
Ives identified two critical steps Musk must take to prevent the situation from escalating into a “more severe black swan event,” a term used to describe unforeseen occurrences with broad repercussions.
Ives suggested that Musk should formally declare his intention to balance his responsibilities at Doge with his role as Tesla CEO. Such a move would help “dissipate” the tension surrounding Tesla and minimize lasting brand damage, although some “scarring” may still remain.
“Investors need to see Musk step back and find a balance between his roles at Doge and Tesla,” he insisted.
after newsletter promotion
He also urged Musk to outline a timeline for the release of new, more affordable vehicles and the rollout of fully autonomous driving in Austin, Texas, by June. “There is one person that Tesla investors need to hear from … Musk,” Ives declared.
Tesla Takedown, an organization that orchestrates protests against Tesla and Musk, has announced its upcoming “day of action,” which includes protests at every showroom in the US and a total of 500 locations worldwide. In a social media post, the group encouraged protesters to “show up in numbers to combat Elon Musk’s alleged illegal coup.”
In a recent interview, Musk labeled Tesla protesters as “deranged” and attributed the protests to his involvement with Doge. “They essentially want to harm me because I’m halting their fraud, and they aim to damage Tesla because we’re putting an end to this dreadful waste and corruption in the government,” Musk stated in an interview with Fox News.
The recall announced on Thursday pertains to a component known as a cant rail—a stainless-steel exterior trim panel—delaminating and potentially detaching from the vehicle. Tesla will replace the rail assembly at no cost.
A detached panel could pose a road hazard and increase the likelihood of a crash, as per the US National Highway Traffic Safety Administration’s notice regarding the recalls.
Tesla has been contacted for comment.
