Tesla Inc (NASDAQ:TSLA) CEO Elon Musk needs to “step up” at this critical juncture for the electric vehicle maker, analysts at Wedbush believe.
Musk doubling down on the Trump administration as the leader of the Department of Government Efficiency (DOGE) has seen more protests occur at Tesla dealerships and violence against Tesla drivers in the US and Europe, analysts highlighted.
“Since Trump's White House 2nd term kicked off in January we have seen Musk and Trump connected at the hip with Musk essentially living at the White House and Mar-a-Lago in Palm Beach,” they wrote in a note to clients.
“There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares.”
Tesla stock is down more than 50% from its highs in December. The stock traded hands at about $227 on Tuesday after shedding about 15% during the previous session.
“If Musk continues to head down the DOGE path 110% and showing no attention to Tesla during this turbulent time then brand damage will become more pervasive as right now our work in the field shows less than 5% (very contained) of Tesla owners would second guess buying a Tesla again due to Musk,” Wedbush’s analysts wrote in a note to clients.
“We have been here before with Musk many times over the last decade and he ultimately stepped up for Tesla shareholders.”
While the analysts see the near-term fundamentals as soft for Tesla, they remain bullish in the long term on the company’s long-term innovation cycle.
“The launching of unsupervised Full Self Driving in Austin, Texas this June kicks off the autonomous era at Tesla that we value at $1 trillion alone on a sum-of-the-parts valuation,” they wrote.
“Autonomous will be the biggest transformation to the auto industry in modern day history and in our view Tesla will own the autonomous market in the US and globally.”
They maintained their Outperform rating and $550 price target on Tesla.