‘Code Red’: Tesla Bull Urges Musk to Quit DOGE and Save EV Giant from Political Backlash

Tesla is facing a high-stakes identity crisis, according to Wedbush Securities analyst Dan Ives — and it all comes down to Elon Musk’s growing entanglement in politics.

In a sharply worded note to investors on Sunday, just ahead of Tesla’s first-quarter earnings report, Ives sounded a “code red” alarm, urging Musk to leave his role in the Department of Government Efficiency (DOGE), a Trump-backed initiative aimed at shrinking the federal government.

“Musk needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time,” Ives wrote. “Tesla is Musk and Musk is Tesla.”

According to Ives, Tesla is suffering from what he calls a “brand crisis” — not just due to underwhelming delivery numbers and economic headwinds, but because of the political baggage Musk now carries. His association with President Trump and his role in DOGE have made Tesla a lightning rod for criticism among progressive buyers — a key demographic for electric vehicle sales.

Brand Damage and Demand Destruction

Ives slashed his price target for Tesla by a dramatic 43% just two weeks ago, largely due to fears about brand damage and the impact of U.S.-China trade tensions. China accounted for over 20% of Tesla’s revenue last year, and the EV maker is now caught in the crossfire of tariffs and anti-Trump sentiment abroad.

“Tesla has unfortunately become a political symbol globally of the Trump Administration/DOGE,” Ives noted. “Protests continue, deliveries are weak, and the stock has been crushed.”

Tesla shares are down 43% since January 17. And while the company is expected to update investors this week on its robotaxi plans and autonomous driving tech, Ives believes the bigger concern is whether Tesla has permanently alienated a slice of its global customer base.

He estimates that Musk’s actions could result in 15% to 20% permanent demand destruction — a devastating blow for a company built on innovation and forward-thinking branding.

A Fork in the Road

Despite the turmoil, Ives remains bullish on Tesla’s long-term prospects. He maintains an “outperform” rating and sees Tesla as one of the most disruptive tech companies in the world. But his warning is clear: Musk must choose.

“We view this as a fork in the road time,” Ives wrote. “If Musk leaves the White House, there will be brand damage, but Tesla will regain its most important asset — Musk himself — as a full-time CEO. If he stays, brand damage will only grow.”

This crossroads comes as Tesla prepares to answer critical questions about its future: How will trade policy affect profitability? What’s the timeline for its robotaxi network? Can it recover from a dip in consumer trust?

For Tesla, and for Elon Musk, the clock is ticking.

{Source: Fortune}

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