Elon Musk May Not Be Able to Save Tesla

During a catastrophic earnings call on Tuesday, Tesla revealed that its net income had plummeted by an astonishing 71 percent since the first quarter of last year.

To calm the storm, CEO Elon Musk pledged that he'd be pulling back from his side gig of gutting the government to refocus on his EV maker.

The carmaker's stock rose after Musk's promise, albeit with some extremely convenient help from Donald Trump. But as Business Insider reports, many investors remain highly concerned that Musk's long-awaited return could be too little, too late.

The mercurial CEO's extremist views and highly controversial work with DOGE have greatly tarnished the carmaker's brand, causing sales to drop precipitously worldwide. Already sold vehicles are depreciating at a breakneck pace, indicating bottoming demand.

In other words, Musk is leaving permanent scars that could make rescuing it this time around impossible.

"Too late dude," one user on Reddit's wallstreetbets community wrote in response to a news article about Tuesday's earnings call. "The damage is done. If you think Q1 is bad, just wait for Q2."

Others pointed out that the CEO spending more time at the company could backfire. After all, being associated with him has proven extremely damaging to the brand. Polls show that Musk has become incredibly unpopular with the public, meaning his return could add fuel to the flames.

"Him becoming MORE involved with Tesla can only hurt the brand more," one Reddit user argued.

"He needs to focus on fixing Tesla's fundamentals," retail trader and Tesla investor Bilaal Dhaletch told BI.

Longtime Tesla bull and Wedbush Securities analyst Dan Ives had a similar outlook.

"The brand damage caused by Musk in the White House/DOGE over the past few months will not go away just by this move and some of the damage will be stained forever in Europe and the US," Ives wrote in a note to investors on Wednesday, as quoted by CNN.

In a desperate bid to undermine the counterprotest movement his behavior has spawned, Musk tried to paint demonstrators at Tesla's dealerships as paid operatives during Tuesday's call, who were "receiving the waste and fraud" from the government.

Musk also made sweeping promises about the company's humanoid Optimus robots and "fully autonomous rides," that prompted skepticism.

To some investors, his comments are distractions from far more insidious problems the carmaker is facing.

"There’s no way to deny what just happened this quarter, whether he admits it or not," Ives told CNN.

Others took a stronger tone, dismissing Musk's promise of spending more time at Tesla and less time at DOGE.

"This idea that he’s focused on Tesla, so its sales are going to pick up are complete garbage," Tesla critic and investment firm GLJ Research founder Gordon Johnson told CNN.

"The damage that he’s done is 100 percent irreversible," he added, pointing out Musk's embrace of far-right beliefs.

Even before the mercurial CEO started leading the gutting of government agencies, Tesla was facing a "nightmare" year in 2024, with tanking deliveries falling well short of expectations. Trump's election, however, had the company's supporters elated, with rallying investors sending the company's shares to record highs towards the end of the year.

But reality has quickly set in afterward. Tesla's stock price has slid by over 32 percent since the beginning of the year, wiping out much of the gains the company had made previously.

As the desirability of Tesla's vehicles continues to drop — owners are buying anti-Elon stickers in droves to promise that they had "bought this before we knew Elon was crazy" — the brand is almost unrecognizable.

"It was a brand that was built around the imminent threat of climate change, a symbol of concern for the environment," branding consultancy Brand Federation founder Kelly O'Keefe told CNN.

"It was a brand people were proud to own," he added. "I don’t know how you take the stain off of Musk’s behavior."

More on Tesla: Musk Says Trump Preventing Him From Building Legion of Robots

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