Tesla In 'Code Red Situation' As Analyst Flags 6 Threats Tied To Musk's Government Role

Ahead of Tesla Inc's (NASDAQ:TSLA) first-quarter earnings on Tuesday, a well-known analyst is drawing a hard line in the sand that CEO Elon Musk should take a step back from the White House and commit fully to the electric vehicle company.

What Happened: Wedbush analyst Dan Ives may be known as one of the biggest bulls when it comes to analysts covering Tesla stock. Like other analysts, Ives has lowered his price target on Tesla stock ahead of Tuesday's earnings report.

Ives maintained an Outperform rating while lowering the price target from $550 to $315 recently.

One of the items keeping Ives less bullish than normal is CEO Musk being less present at the electric vehicle company and more involved with the Donald Trump White House administration.

"Musk needs to leave the govt, take a step back on DOGE, and get back to being CEO of Tesla full-time in our view," Ives recently tweeted.

The analyst said Tesla is at a crossroads and this could be a "code red situation" as first-quarter earnings are important and represent a look at the future of the company.

Ives outlined six major concerns about Tesla amid Musk's new White House role at the Department of Government Efficiency, as shared by Teslarati.

1. Tesla has now unfortunately become a political symbol globally of the Trump administration/DOGE
2. Tesla's stock has been crushed since Trump stepped back into the White House
3. Brand damage to Musk/Tesla resulted in a terrible 1Q delivery number, with much lower 2025 deliveries on the horizon
4. Protests and violence against Tesla dealerships/owners have erupted around the globe
5. 25% auto tariffs have been enacted, delaying future lower-cost models for Tesla, even though Musk is vocally against the tariffs for obvious reasons
6. Potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE

The analyst said Musk and Tesla have now become synonymous with the Trump administration.

Read Also: Dan Ives Says Tesla ‘Best Positioned’ To Deal With Tariffs: ‘It Will Ultimately Be Finished Cars Vs Auto Parts’

Why It's Important: The comments from Ives come as Tesla shareholders seek answers on tariffs, new vehicle models, and FSD, along with commentary on Musk's role within the company.

Despite the criticism of Musk's White House role, Ives remains bullish on the electric vehicle company.

"We believe Tesla along with Nvidia are two of the most disruptive technology companies on the globe over the coming years. The unparalleled innovation, engineering scale, autonomous roadmap, and robotics future will unleash massive valuation upside over the coming years in our view," Ives said.

The analyst said the timing and rollout plans for unsupervised Full Self-Driving and the details of more affordable vehicles need to be laid out by Musk.

Ives said after speaking to car buyers around the globe, the brand damage to Tesla is real.

"Tesla is Musk and Musk is Tesla."

An announcement by Musk about his time coming to an end or being minimized with DOGE could go a long way to restoring confidence in the future of Tesla and the share price on Tuesday.

"Tesla will have its most important asset and strategic thinker back as full-time CEO to drive the vision and the long-term story will not be altered," Ives said, as reported by Newsweek. "If Musk chooses to stay with the Trump White House, it could change the future of Tesla."

Ives tweeted on Tuesday that the first-quarter earnings and conference call could be one of the biggest in company history.

TSLA Price Action: Tesla stock is up 4.3% to $237.31 on Tuesday versus a 52-week trading range of $141.11 to $488.54. Tesla stock is down 37.3% year-to-date in 2025.

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Image created using artificial intelligence via Midjourney.