One of Tesla’s (TSLA) biggest backers on Wall Street is warning that investors are running out of patience with Elon Musk’s lack of focus — and he needs to “step up” as CEO.
“In a nutshell the word ‘balance’ has been missing with Elon Musk and his ability to run Tesla as CEO… while instead focusing all of his energy and time driving his [Department of Government Efficiency] initiative within the Trump Administration,” Wedbush Securities analyst Dan Ives said in a note this week.
Musk was a major supporter of President Donald Trump during his presidential campaign and transitioned into becoming a senior White House adviser after Trump’s inauguration. He now leads DOGE, which pushes federal agencies to issue mass layoffs and enact other spending cuts, and has frequently weighed in on foreign politics.
Protests have been organized at Tesla showrooms and facilities across the country since Trump was inaugurated in January. Many peaceful demonstrations have taken place, including a slew of protests held on Sunday, such as a 300-person rally held at a Tesla showroom in Boston and another at a showroom in Vancouver, Washington.
But more than a dozen violent or destructive acts have been directed at the company’s facilities since the inauguration, according to The Washington Post, including one instance where an individual planted a Molotov cocktail near a vehicle. There have also been several reports of individual vehicles or Superchargers being vandalized.
His comments on foreign political affairs, such as Germany’s recent election or Russia’s war against Ukraine, have sparked backlash in Europe. Several attacks have been launched against Tesla vehicles and facilities there, while sales dropped in most countries.
“Tesla investors are seeing patience wear thin as Musk is not reading the room,” Ives wrote, noting that there has been “little to no sign of Musk at any Tsla factory or manufacturing facility in the last two months.”
But as those opposing Musk have stepped up, Republicans have likewise stepped in. Several prominent conservatives, such as Fox News (FOXA) host Sean Hannity, have showed off or purchased a new Tesla and encouraged their followers to do the same.
Tesla stock was up almost 4% in pre-market trading on Wednesday following an almost 4% increase the previous day. The stock is still down more than 35% year-to-date.
Trump on Tuesday had Tesla bring five electric vehicles to the White House’s southern lawn, including a cherry red Model S luxury, which he purchased. He said he’d pay market price for the electric car, which starts at $80,000, and had already purchased a Cybertruck for his granddaughter.
“Well, I hope it does,” Trump told reporters when asked if his showcase would help Tesla’s sales. “When somebody is a great patriot, they shouldn’t be hurt. He’s a great patriot.”
Musk on Tuesday also pledged that Tesla would double its vehicle production in the U.S. over the next two years. It’s unclear how much of that would involve new investments, given that Tesla plans to announce new, affordable models in 2025 and plans to begin producing the Cybercab robotaxi. Tesla also builds the Semi electric truck in Nevada and has the long-awaited next-generation Roadster in the works.
The Future Fund’s Gary Black on Tuesday estimated that there are 33.7 million potential Tesla buyers among Republicans. If 5% of that number committed to doing so, that would give Tesla 1.7 million purchases, according to Black.
However, it’s unclear whether Tesla will actually benefit from a “Trump bump.” Republicans have always been a part of Tesla’s customer base, partially due to the cars being an attractive option for wealthy buyers. But overall, electric cars are more popular with Democrats.
Between 2012 and 2022, about half of new EVs were sold in the 10% most Democratic counties in the U.S., according to a working paper published in October 2023. A third went to the top 5% most Democratic counties.
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