Tesla risks 'code red' crisis if Musk continues DOGE role, analyst cautions.

Elon Musk’s dual roles at Tesla and the Department of Government Efficiency (DOGE) are sparking investor alarm as Tesla grapples with a rocky 2025. Ahead of Tuesday’s pivotal earnings call, Wedbush Securities analyst Dan Ives, a long-time Tesla advocate, warned of a “code-red situation” if Musk continues leading DOGE. “Musk must step back from government and refocus as Tesla’s full-time CEO,” Ives urged in a Sunday note, echoing his March caution about a “brand crisis tornado” amid plunging sales and protests tied to Musk’s political involvement.
Tesla’s stock has cratered 40% this year, with Q1 deliveries missing targets. Wedbush slashed its 12-month price target from $550 to $315, citing Tesla’s politicized image. Shareholder questions for the earnings call reflect unease, probing potential tariff impacts, brand damage from Musk’s DOGE role, and whether the board will push for his exclusive focus on Tesla. Some also sought updates on the delayed affordable EV, now reportedly pushed beyond its planned mid-2025 launch, and the upcoming robotaxi service.
Ives remains optimistic about Tesla’s AI and robotics potential, citing Musk’s innovation track record. However, he blames DOGE duties for fueling anti-Musk sentiment, driving vandalism, and hurting EV demand. To stabilize Tesla, Ives said Musk must use the earnings call to confirm the Austin robotaxi rollout this summer, clarify plans for affordable vehicles and Optimus robots, and address his government role’s fallout. “This is a fork in the road,” Ives wrote, warning of lasting brand damage if Musk stays at DOGE, but a revitalized Tesla if he returns full-time.
Neither Musk nor Tesla responded to comment requests sent outside business hours. With investors on edge, Tuesday’s call will be critical for Musk to restore confidence and steer Tesla through its challenges.