Elon Musk Has to Lead Tesla, Ives Says

The fate of Tesla, Inc. (NASDAQ: TSLA) hinges on Elon Musk’s ability to prioritize his role as CEO over his controversial government appointment, according to Wedbush Securities analyst Dan Ives. In 2025, Musk’s dual role as head of the U.S. Department of Government Efficiency (DOGE) and Tesla’s visionary leader has sparked a “code red” crisis, with Ives warning that Tesla’s brand, sales, and stock value face irreversible damage unless Musk focuses fully on the automaker.

Musk’s Divided Focus Threatens Tesla’s Momentum

Ives’s analysis underscores that Musk’s alignment with the Trump administration’s DOGE has turned Tesla into a political lightning rod. Global protests, declining sales, and a 40-45% year-to-date stock decline by early 2025 reflect the backlash. Ives estimates that Tesla could face 15-20% permanent demand destruction as progressive consumers and international markets distance themselves from the brand. The analyst cites falling first-quarter deliveries—down sharply from 2024’s near-1.8 million global total—and delays in critical projects like the $25,000 affordable EV and Austin robotaxi service as evidence of Musk’s distraction.

The political turmoil has also strained investor confidence. Ives reduced Tesla’s 12-month price target from $550 to $315 in early 2025, arguing that Musk’s divided attention undermines execution of long-term bets like AI-driven autonomous systems and energy storage.

A Strategic Pivot and the Road Ahead

By late Q1 2025, Musk began realigning priorities, signaling a shift away from DOGE to focus on Tesla. This pivot alleviated investor fears, with shares rising 3-4% post-earnings despite a 71% drop in net income to $409 million and a 9% revenue decline to $19.34 billion. Ives called the move a “turning point in the Tesla story,” raising his price target to $350 and reaffirming a “BUY” rating.

The analyst highlights three critical challenges Musk must address:
1. Robotaxi Rollout: Confirming the 2026 launch timeline for its autonomous ride-hailing service.
2. Affordable EV: Delivering on the delayed under-$25,000 model to capture mass-market demand.
3. Brand Recovery: Mitigating political fallout by distancing Tesla from controversial policies like U.S.-China trade tariffs.

The Tesla Leadership Paradox

Ives’s warnings reflect a broader truth: Tesla’s valuation remains tethered to Musk’s unique vision and execution. The company’s 15% year-to-date stock rebound in Q2 2025, despite weak earnings, underscores the “Musk premium”—investor confidence in his ability to innovate even amid governance risks. Yet, without tangible progress on affordability and autonomous systems, optimism could fade.

The analyst also dismisses reports of Tesla seeking a new CEO, stressing that the board’s “warning shot” to Musk was a call for accountability, not replacement. “Musk is Tesla’s most important asset,” Ives insists. “Without his full focus, the company’s disruptive potential fades.”

Conclusion: Tesla’s Future Hangs on Musk’s Choice

The data paints a clear picture: Musk’s leadership is non-negotiable for Tesla’s survival. With global EV competition intensifying—NVIDIA’s AI advancements and China’s BYD outpacing Tesla in affordability—Musk’s return to full-time CEO duties has bought the company a reprieve. However, execution remains critical.

Key statistics reinforce this point:
- Tesla’s Q2 deliveries fell 15% year-on-year, signaling ongoing demand challenges.
- The stock’s 45% year-to-date decline in early 2025 narrowed to a 15% gain by mid-year after Musk’s pivot, proving investor sensitivity to leadership clarity.
- Ives’s $350 price target assumes Musk delivers on the robotaxi and affordable EV, but risks persist if geopolitical tensions or supply chain bottlenecks resurface.

In the end, Tesla’s trajectory in 2025 and beyond depends on one question: Can Elon Musk remain the CEO, not the politician? For now, the answer—and the stock—rest with him.