Tesla Faces ‘Code Red’ Territory

By Douglas A. McIntyre Published Apr 21, 10:10AM EDT

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Investors worry that Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk is spending too much time aiding the Trump administration.
The EV maker has lost over 40% of its market value since mid-January.
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Several investors worry that Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) CEO Elon Musk is spending too much time on a Trump administration project called DOGE, or Department of Government Efficiency, which was created to take hundreds of billions of dollars out of the federal budget. This means he has spent little time on his two most prominent companies, SpaceX and Tesla.

Tesla, a public company, has lost over 40% of its market value since mid-January. Potential consumers have turned away from buying its vehicles. Some owners have turned theirs in, often at significant discounts.

One of Tesla’s most visible Wall Street analysts recently said the company is about to hit “Code Red.” This will coincide with its first-quarter earnings release on Tuesday. Wedbush’s Dan Ives wrote that Tesla is Musk, and Musk is Tesla. Musk’s damage to the company is a real thing. Ives mentioned that the damage had been done in a challenge in other nations. He also said that the damage might permanently undermine its sales by 15% to 20%.

Ives’s opinion has a lot of support. Tesla shipments worldwide declined by slightly more than 1% last year to 1.8 million. In the first quarter of this year, that drop’s pace has quickened. And Tesla has delayed the launch of its new, inexpensive car until next year. Inexpensive electric vehicles (EVs) are crucial to EV adoption.

What is unclear is whether Musk’s return to the company will turn it around in any meaningful way. However, Ives still views Tesla as having a critical disruptive technology. What Ives does not make clear is that other companies, like Google’s Waymo, are working on a parallel track.

Ives’s concession is that, if Musk does not leave the White House soon, the damage to Tesla will be extensive and not reversible.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.