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Tesla has a big Musk problem, and Wall Street's biggest bull is not happy

Tesla has a big Musk problem, and Wall Street's biggest bull is not happy

  • 20.03.2025 12:27
  • morningstar.com
  • Keywords: Musk, Tesla

Tesla's stock has dropped significantly this year due to declining demand and competition, with Wedbush analyst Dan Ives criticizing Elon Musk's leadership. Ives warns that Musk must focus solely on Tesla and provide a clear roadmap for new vehicles to prevent further decline and maintain brand integrity.

Tesla ProductsTesla ServicesTSLAsentiment_dissatisfied

Estimated market influence

Tesla

Tesla

Negativesentiment_dissatisfied
Analyst rating: Neutral

The article discusses Tesla's stock decline and the challenges faced by Elon Musk as CEO, which are impacting the company's performance.

Wedbush

Positivesentiment_satisfied
Analyst rating: N/A

Wedbush analyst Dan Ives maintains an outperform rating on Tesla despite its stock decline, indicating confidence in the company's future under Musk if certain changes occur.

Context

Analysis of Tesla's Market Challenges and Strategic Imperatives

Key Facts and Data

  • Stock Performance: Tesla (TSLA) has experienced a significant decline in stock price, dropping 41.6% year-to-date through Wednesday.
  • Market Context: This decline makes TSLA the biggest loser in the S&P 500 index over the same period.
  • Analyst Outlook: Despite this, Wedbush analyst Dan Ives maintains an "outperform" rating on Tesla with a price target of $550, implying a potential upside of 133% from Wednesday's closing price of $235.86.

Market Trends and Business Impact

  • Slowing Demand: The EV market is facing reduced demand, likely due to increased competition.
  • Political Diversion: Elon Musk's involvement with the Department of Government Efficiency (DOGE) and political activities have diverted attention from Tesla operations, leading to public backlash and protests at Tesla facilities.

Strategic Considerations

Required Actions for Elon Musk

  1. Reaffirm Commitment to Tesla:

    • Musk must make a formal announcement committing to focus on Tesla alongside his other roles.
    • This should occur before or during the company's next quarterly update in May.

  2. Clear Roadmap for Future Products:

    • Provide a detailed timeline and strategy for the 2025 release of lower-cost vehicles.
    • Outline specifics regarding the full-self-driving car launch scheduled for June.

Competitive Dynamics

  • Competitor Response: Rival EV maker Polestar (PSNY) is capitalizing on Tesla's challenges by offering a $5,000 "conquest bonus" to Tesla owners who lease a Polestar vehicle.
  • Potential Impact: This incentive could attract Tesla customers and further erode market share if not countered.

Long-Term Effects and Regulatory Impacts

  • Brand Reputation: Musk's political involvement has damaged Tesla's brand image, leading to protests and negative incidents involving Tesla vehicles.
  • Investor Sentiment: Investors are closely monitoring whether Musk can balance his multiple roles without further harming the company's reputation and performance.

Conclusion

Tesla faces critical challenges that require immediate strategic adjustments. While Dan Ives remains bullish on the stock, he emphasizes the need for Musk to refocus on Tesla and provide clear leadership to stabilize the company's position in the EV market.