Dan Ives Warns: Musk Must Abandon DOGE Role to Salvage Tesla’s Future Ahead of Q1 2025 Earnings

The upcoming Tesla (TSLA) Q1 2025 earnings report is shaping up to be a pivotal moment for the electric vehicle pioneer, but analysts are sounding alarms over CEO Elon Musk’s controversial involvement in a new political role. Wedbush Securities analyst Dan Ives has issued a stark warning: Musk must abandon his position as head of the Department of Government Efficiency (DOGE) within the Trump administration and refocus fully on Tesla to avert a deepening crisis.

The "Code Red" Situation

Ives, a longtime Tesla bull, now labels the automaker’s current trajectory a “code red situation” due to Musk’s dual role as Tesla’s CEO and a political appointee. His analysis highlights a confluence of risks tied to Musk’s government work, including brand damage, declining sales, and geopolitical fallout. Key data points underscore the urgency:

• Q1 Deliveries Miss Estimates: Tesla’s first-quarter deliveries fell to 336,681 units, a 13% year-over-year drop, missing estimates of 390,000. This marks the worst performance since Q2 2022.
• Market Share Erosion: In California, Tesla’s largest U.S. market, its EV registrations dropped to 43.9% in Q1 2025 from 55.5% a year earlier. Rival EV sales surged 35% during the same period.
• Stock Price Plunge: Tesla’s shares have fallen 40% year-to-date (to $240.89), underperforming the S&P 500’s 10% decline.

Why Musk’s DOGE Role Matters

Ives argues that Musk’s leadership of DOGE—a government entity advocating for federal spending cuts and interventionist policies—has turned Tesla into a “political symbol globally.” This has fueled protests, vandalism, and consumer backlash in key markets:

• Protests and Vandalism: Over 300 demonstrations targeted Tesla dealerships in the U.S., Europe, and Asia since Trump’s January 2025 inauguration. Incidents include Molotov cocktails placed near vehicles and Supercharger vandalism.
• Brand Damage: A YouGov/Yahoo News poll found 67% of U.S. adults would not buy a Tesla, with 37% citing Musk’s political role as the reason. In Europe, Tesla sales dropped 50% in Germany, Denmark, and Sweden.
• Demand Destruction Risk: Ives warns of potential 15–20% permanent demand destruction due to Tesla’s association with controversial policies, such as Trump’s tariffs and Musk’s involvement in foreign political disputes.

The Fork in the Road

The Q1 earnings call on April 22 will force Musk to address this existential dilemma:

1. Stay with DOGE: Risk further brand harm, regulatory scrutiny, and investor flight. Analysts project Tesla’s revenue could hit $21.82 billion in Q1, a marginal 2% rise, but margins are under pressure as tariffs and supply chain disruptions bite.
2. Return to Tesla: Regain focus on product launches (e.g., the delayed affordable EV) and autonomous driving, but face lingering reputational scars.

Ives maintains an Outperform rating but slashed his price target to $315 from $550, citing the “brand tornado crisis” and tariff risks. The analyst frames this as a “fork in the road”: Musk’s choice will determine whether Tesla emerges as a tech leader or succumbs to political overreach.

Data-Driven Concerns

• China Exposure: Over 20% of Tesla’s 2024 revenue came from China, now threatened by trade tensions.
• Robotaxi Delays: The Austin rollout faces hurdles, with Reuters reporting production delays for the Cybercab due to supply chain issues.
• Competitor Surge: Rivals like BYD and Lucid are capitalizing on Tesla’s struggles, eroding its dominance.

Conclusion: Musk’s Moment of Truth

Dan Ives’s warnings crystallize a stark reality: Tesla’s future hinges on Musk’s ability to prioritize its operational leadership over his political ambitions. While the company retains disruptive potential in AI and robotics, its current trajectory—marked by declining sales, geopolitical risks, and brand damage—requires immediate action.

The Q1 earnings report will test whether Musk can pivot the narrative back to innovation or if the “code red” situation deepens. With shares down 40% year-to-date and Wedbush’s lowered targets, investors are demanding clarity on Musk’s focus, Tesla’s China strategy, and its path to recovery. As Ives succinctly put it: “Tesla is Musk, and Musk is Tesla.” The next 72 hours will reveal whether that symbiosis can save the company—or sink it.

Final Takeaway: Tesla’s survival as a tech leader depends on Musk stepping away from DOGE. The data shows the cost of distraction: a 15–20% demand hit, a 40% stock decline, and a brand in crisis. The earnings call is Musk’s chance to prove he’s still the visionary Tesla needs.