Tesla faces a brand crisis. The one guy who can fix it is MIA

New York (CNN) — Elon Musk seems to be everywhere these days, just not in the place he’s most needed: at the helm of his flailing electric vehicle company.

Tesla is one of the worst-performing stocks in the S&P 500 so far this year. Sales are falling around the globe. The US resale market is crumbling. Tesla’s militaristic Cybertruck is under a recall order because of an exterior panel that can fall off the vehicle while driving. The company was abruptly booted from this week’s Vancouver International Auto Show over unspecified safety concerns. And according to an analysis by the Financial Times, there’s about $1.4 billion that just sort of disappeared from the company’s balance sheet.

That’s to say nothing of the company’s brand identity. Tesla was once a badge of pride for upwardly mobile, environmentally conscious lefties. More recently, it has become a talisman of an increasingly authoritarian right wing.

Investors — even Tesla’s staunchest supporters — are rapidly losing patience.

On Thursday, Wall Street’s No. 1 Tesla bull pleaded with Musk and Tesla’s board to “stop being silent” and fix their mess.

“Let’s call it like is: Tesla is going through a crisis and there is one person who can fix it … Musk,” wrote Wedbush Securities analyst Dan Ives in a note to clients. “Tesla is Musk, and Musk is Tesla. They are synonymous and cannot be separated.”

But where is the boss?

“Musk is spending 110% of his time with DOGE (and not as Tesla’s CEO),” Ives said.

Another major investor, Ross Gerber of Gerber Kawasaki Wealth and Investment Management, told CNN’s Erin Burnett on Thursday that “there isn’t more that Elon could do to turn off customers” and that it’s time for the board to find a new CEO.

Tesla didn’t respond to CNN’s request for comment.

Late Thursday night, Musk addressed employees in an all-hands meeting broadcast on X, acknowledging the “bit of stormy weather” hitting Tesla’s shares. He also repeated his claim that Tesla is on track to make its vehicles fully autonomous and encouraged employees to hold on to their stock.

It’s hard to overstate how unusual it is for a Tesla cheerleader like Ives to so pointedly criticize Musk.

Over the years, investors have tolerated all kinds of behavior in Musk — his racist tweets, his spreading of Covid-19 misinformation, publicly inviting business partners to go f*** themselves, to name just a few — that they would find unacceptable for other CEOs. His antics were priced in because Tesla was so undeniably ahead of its competition.

And though he was prone to childish outbursts, investors knew Musk would lock in if Tesla were in trouble. When the company fell behind on Model 3 production in 2018, Musk told the press he was sleeping on the factory floor and working through the night to make sure Tesla met its target.

To be sure, Tesla is still the most popular EV maker in America. But it is rapidly losing market share in the US and abroad — partly because of rising competition and partly because Tesla itself hasn’t done enough to innovate.

Those core business concerns are the primary reasons investors have slashed their Tesla holdings, causing the stock to lose half its value since December.

Musk’s mad-oligarch turn is hardly helping. Until recently, Wall Street might have shrugged at the public’s performative boycotts, occasional vandalism or one-off protests outside a Tesla showroom. But, as Ives notes, social movements against Musk are creating real hazards that threaten to drag the stock deeper into the gutter.

Also not helping: The people publicly pumping Tesla up are some of the most powerful voices on the planet — and even they can’t pull the stock out of its spiral, which is closing in on nine straight weeks of declines.

In a Fox News appearance Wednesday night, Commerce Secretary Howard Lutnick straight-up told viewers to “buy Tesla” — the kind of explicit endorsement that appeared to run afoul of government ethics rules that bar officials from using their office to endorse specific companies or products.

Lutnick’s pitch didn’t seem to help much; Tesla shares fell 1.7% in premarket trading Thursday. A late afternoon rally pushed shares up 0.17% for the day.

A week earlier, President Donald Trump himself — historically not a fan of EVs — peddled Teslas on the South Lawn of the White House, giving the company’s shares a sharp but short-lived bump.

Bottom line: Musk, whose vast fortune is directly linked to his 13% stake in Tesla, sauntered into Washington two months ago with a vision of running the government like a business. In doing so, he appears to be neglecting the actual business that made him a household name and the world’s richest person.

Correction: Tesla was the second-worst performing stock in the S&P 500 as of Thursday’s closing price. An earlier version of this article misstated Tesla’s performance relative to the rest of the index.

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