Tesla and Elon Musk are embroiled in a “brand tornado crisis moment” and the electric carmaker’s chief executive needs to cut back on his work for Donald Trump to stem the damage, one of the company’s biggest supporters has said.
The warning came as Tesla announced a recall of 46,000 Cybertrucks in the US on Thursday to fix an exterior panel that could detach while driving.
On Wednesday, protesters said they were planning what they described as their biggest day of action yet against the EV maker, with 500 demonstrations expected at Tesla showrooms around the world on 29 March.
It also emerged that the Vancouver International Auto Show has removed Tesla from its event hours, citing security concerns.
Tesla shares have lost a third of their value over the past month because of a number of investor concerns including the impact on sales from Musk’s involvement with the Trump administration, including gutting some federal agencies through his “department of government efficiency” (Doge).
Dan Ives, managing director at the US financial firm Wedbush and a self-described Tesla “core bull”, said Musk’s role leading Doge was damaging the multibillionaire’s personal reputation and the business he runs.
“The brand damage started off as limited in our view based on our initial survey work … but now has spread globally over the last few weeks into what we would characterise as a brand tornado crisis moment for Musk and Tesla,” Ives wrote in a note to investors.
Musk has axed jobs and spending in his role, although a US judge ruled on Tuesday that Musk and Doge were likely to have violated the US constitution by shutting down the US Agency for International Development.
Ives cited protests at Tesla showrooms, cars being vandalised and demonstrations sprouting around the world as evidence of a “massive overhang for Tesla’s stock”. He said Musk faced a “moment of truth” and needed to act.
“Tesla and Musk are facing a defining chapter in their future and how Musk handles this next few months will be pivotal to the long-term growth trajectory of Tesla in our view,” he wrote. “Tesla is Musk and Musk is Tesla … they are synonymous and attached together and cannot be separated.”
Ives said Musk had to do two things to stop the crisis snowballing into a “much more black swan event”, a reference to an unforeseen event with wide-ranging consequences.
Ives said Musk needed to announce formally that he was going to balance running Doge with being Tesla’s chief executive. Doing so would “dissipate” the heat around Tesla and avoid permanent brand damage, although there would still be a “scar”, he said.
“Investors need to see Musk take a step back and balance his Doge and Tesla CEO roles,” Ives said.
He also called on Musk to set out plans and timing for the release of new, cheaper vehicles along with the rollout of fully self-driving vehicles in Austin, Texas, in June. “There is one person Tesla investors need to hear from … Musk,” Ives said.
The Vancouver Auto Show said it was removing Tesla hours before the show got under way on Wednesday in western Canada, with organisers telling reporters the decision had not been made lightly.
“The Vancouver International Auto Show has removed Tesla as a participant in this week’s event, after the automaker was provided multiple opportunities to voluntarily withdraw,” the show’s executive director, Eric Nicholl, said in a statement.
“The Vancouver Auto Show’s primary concern is the safety of attendees, exhibitors and staff. This decision will ensure all attendees can be solely focused on enjoying the many positive elements of the event.”
Last year nearly 130,000 people attended the show. Organisers said they were expecting a similar turnout for this year’s lineup of 200 or so vehicles.
For months, Musk has faced a backlash in Canada over his backing of Trump, which has intensified in recent weeks after the president plunged Canada into a bitter trade war and repeatedly mused about the country becoming the 51st state of the US.
More than 375,000 people in Canada have signed a petition, launched in late February, to strip Musk of his Canadian citizenship.
On Tuesday, the US attorney general, Pam Bondi, described recent attacks on Tesla dealerships as “domestic terrorism”.
Meanwhile, Tesla Takedown, which organises protests against Tesla and Musk, announced its “day of action”, including protests at every showroom in the US and at a total of 500 sites around the world. In a post on social media the group urged protesters to “turn out in numbers to fight Elon Musk’s illegal coup”.
In an interview this week, Musk called Tesla protesters “deranged” and blamed the protests on his involvement with Doge. “They basically want to kill me because I’m stopping their fraud, and they want to hurt Tesla because we’re stopping this terrible waste and corruption in the government,” he told Fox News.
Trump’s commerce secretary defended the company on Wednesday, urging Americans to buy Tesla stock.
“I think, if you want to learn something on this show tonight, buy Tesla,” Howard Lutnick told Fox News. “It’s unbelievable that this guy’s stock is this cheap. It’ll never be this cheap again.”
However, Tesla shares were down more than 1% on Thursday afternoon.
The Tesla recall issued on Thursday was related to a part called a cant rail – a stainless-steel exterior trim panel – delaminating and detaching from the vehicle, the company said. As a remedy, Tesla will replace the rail assembly free of charge.
A detached panel can become a road hazard and increase the risk of a crash, according to the US National Highway Traffic Safety Administration’s notice on the recalls.
Tesla was approached for comment.
