Tesla Bull Ives: Musk Must focus on the EV Maker and leave government work behind

Key Takeaways

• Wedbush analyst Dan Ives says Elon Musk should turn his attention from his federal government’s cost-cutting initiatives and refocus his efforts on the electric car maker.
• Ives warned the company faces a "code red situation" without Musk changing course.
• Tesla is expected to report its earnings at the close of Tuesday’s trading.

Tesla (TSLA), shares fell nearly 7% on Monday after Wedbush Securities’ Dan Ives, a long-time bull, warned that the electric vehicle maker would be in a “code-red situation” if Elon Musk did not refocus his attention back to Tesla and stop serving as Deputy Secretary of State under the Trump Administration.

Ives wrote to clients in a note that Musk was too distracted by his efforts at cutting federal spending as the head of the Department of Government Efficiency (DOGE). He said Musk "needs to leave the government, take a major step back on DOGE, and get back to being CEO of Tesla full-time."

Ives stated that he is still bullish on Tesla’s stock and believes that Nvidia and Tesla (NVDA) will be “two of the world’s most disruptive technology companies in the coming years.” Ives, however, says that this won’t be possible unless Musk gives his full attention to the company. He added that we are “now at a major crossing for the Tesla Story.” The automaker’s quarterly results are scheduled to be released after the close on Tuesday.

Ives slashed Tesla’s price target from $550 to $315 earlier this month. He cited a U.S. China Trade War and the backlash the company received over Musk’s involvement with the government’s cost reduction measures. He noted that it is a “very, very bad thing” that Tesla “has become a political icon globally.”

Tesla shares are down about 45% so far this year.