Tesla Shares Plunge 7% Ahead of Earnings, Spotlight Back on Musk's Role as CEO

Tesla shares: In the past few months, Elon Musk has been making headlines not for his role as CEO of the EV giant, but for his involvement in Trump’s newly formed administration wing, DOGE. However, ahead of Tesla’s upcoming earnings, investor focus has shifted back to Musk’s role as CEO. And, the initial signal is quite evidently not good.

Tesla shares plunged around 7.6% on the tech-heavy index Nasdaq as investors eagerly wait for the EV-maker's Q1 results. Wedbush Securities' analyst Dan Ives reportedly said in a market note that "Musk needs to leave the government, take a step back on DOGE, and get back to being CEO of Tesla full-time.”

While Ives did mention that Tesla, along with Nvidia "are two of the most disruptive technology companies on the globe over the coming years," his criticism remained balanced.

“Tesla has unfortunately become a political symbol globally of the Trump Administration/DOGE,” wrote Ives. So far this year, the shares of the luxury EV-maker have declined over 40% to $223 price level from around $380 recorded in January month. And even though some might cite the broader market decline as the reason, the sell-off has been far worse in Tesla's case.

Problems Mount for Tesla

Earlier this year, Chinese EV-maker BYD surpassed Tesla to become the world’s top EV seller. BYD delivered around 4.27 million vehicles in 2024, more than double Tesla’s total. On top of this, protests against the company coupled with weak delivery numbers for Q1 have also added to the subdued investor sentiment.

Ives said that Tesla might witness “potentially 15%-20% permanent demand destruction for future Tesla buyers due to the brand damage Musk has created with DOGE.”

“(For Tesla) It’s turned into a nightmare for Tesla and for investors,” Ives told CNN. “The tariffs, the DOGE controversies, the brand damage — it’s been a perfect storm.” In the last 6 months, Tesla shares have struggled to remain in the green territory, delivering a mere return of just 2-3%