Tesla Faces Brand Crisis as Musk’s Trump Work Sparks Backlash and 46,000 Cybertrucks Recalled
Tesla, the electric vehicle giant, is navigating a turbulent period as CEO Elon Musk’s involvement with former President Donald Trump’s administration continues to spark backlash. The company is also grappling with a recall of 46,000 Cybertrucks in the U.S. due to safety concerns. These challenges have led to what one analyst describes as a “brand tornado crisis moment” for Tesla, raising questions about its future trajectory.
The recall announced on Thursday, involves an exterior panel on the Cybertruck that could detach while driving. This issue has added to Tesla’s growing list of problems, which include protests at its showrooms, security concerns at events, and a significant drop in its stock value. As Tesla faces mounting pressure, Musk’s dual role as CEO and his work with Trump’s “Department of Government Efficiency” (Doge) has come under intense scrutiny.
Dan Ives, managing director at Wedbush Securities and a long-time Tesla supporter, has warned that Musk must take immediate action to address the crisis. Ives emphasized that Tesla’s brand damage is no longer limited but has spread globally, creating a defining moment for the company.
Tesla’s Brand Crisis Deepens Amid Protests and Recall
Tesla’s brand image has taken a significant hit in recent weeks, with protests erupting at its showrooms worldwide. Activists have planned what they call their “biggest day of action” against the company, with 500 demonstrations expected on March 29. These protests are a response to Musk’s involvement with the Trump administration and his role in leading Doge, which has been criticized for gutting federal agencies.
The backlash has also affected Tesla’s participation in major events. The Vancouver International Auto Show removed Tesla from its lineup hours before the event began, citing security concerns. Eric Nicholl, the show’s executive director, stated that the decision was made to ensure the safety of attendees, exhibitors, and staff. This move highlights the growing tension surrounding Tesla and its CEO.
Adding to the company’s woes, Tesla announced a recall of 46,000 Cybertrucks due to a faulty exterior panel that could detach while driving. The U.S. National Highway Traffic Safety Administration (NHTSA) warned that a detached panel could become a road hazard, increasing the risk of accidents. Tesla has pledged to replace the affected parts free of charge, but the recall has further dented the company’s reputation.
Musk’s Dual Roles Under Fire
Elon Musk’s involvement with Trump’s Doge initiative has drawn widespread criticism, with many accusing him of overextending himself. Musk has been tasked with streamlining federal agencies, but his efforts have been controversial. A U.S. judge recently ruled that Musk and Doge likely violated the Constitution by shutting down the U.S. Agency for International Development.
Dan Ives has urged Musk to step back from his Doge responsibilities to focus on Tesla. “Investors need to see Musk take a step back and balance his Doge and Tesla CEO roles,” Ives said. He warned that failure to do so could lead to permanent brand damage, describing the current situation as a “moment of truth” for Musk and Tesla.
Musk, however, has defended his actions, calling Tesla protesters “deranged” and blaming the backlash on his efforts to combat government waste and corruption. In an interview with Fox News, Musk claimed that his critics want to “kill” him and harm Tesla because he is disrupting their fraudulent activities.
Tesla’s Stock Plummets Amid Growing Concerns
Tesla’s stock has lost a third of its value over the past month, reflecting investor concerns about the company’s direction. Musk’s involvement with Trump, coupled with the Cybertruck recall and protests, has created what Ives describes as a “massive overhang” for Tesla’s stock.
Despite the challenges, some supporters remain optimistic. Howard Lutnick, Trump’s commerce secretary, urged Americans to buy Tesla stock during a Fox News interview. “It’s unbelievable that this guy’s stock is this cheap. It’ll never be this cheap again,” Lutnick said. However, Tesla shares continued to decline, dropping more than 1% on Thursday.
Ives has called on Musk to announce plans for new, cheaper vehicles and the rollout of fully self-driving technology in Austin, Texas, by June. He believes these moves could help restore investor confidence and stabilize Tesla’s stock.
Global Backlash Against Musk and Tesla
The backlash against Tesla and Musk is not limited to the U.S. In Canada, more than 375,000 people have signed a petition to strip Musk of his Canadian citizenship. The petition, launched in late February, reflects growing anger over Musk’s support for Trump and his role in exacerbating trade tensions between the U.S. and Canada.
Tesla Takedown, a group organizing protests against the company, has announced a global “day of action” on March 29. The group has urged supporters to “turn out in numbers to fight Elon Musk’s illegal coup.” These protests are expected to take place at every Tesla showroom in the U.S. and at 500 sites worldwide.
The Vancouver Auto Show’s decision to exclude Tesla underscores the broader challenges facing the company. With nearly 130,000 attendees last year, the event is a key platform for automakers to showcase their latest models. Tesla’s absence is a significant blow to its efforts to maintain a positive public image.
Tesla’s Path Forward
As Tesla navigates this turbulent period, the company’s future hinges on Musk’s ability to address the growing concerns. Ives has outlined two critical steps Musk must take: formally announcing a balance between his Doge and Tesla roles and unveiling plans for new vehicle releases.
“Tesla and Musk are facing a defining chapter in their future,” Ives wrote in a note to investors. “How Musk handles this next few months will be pivotal to the long-term growth trajectory of Tesla.” He emphasized that Tesla and Musk are inseparable, and any damage to Musk’s reputation directly impacts the company.
The recall of 46,000 Cybertrucks is a reminder of the technical challenges Tesla faces as it scales production. While the company has pledged to address the issue, the recall adds to the growing list of concerns that investors and consumers have about Tesla’s quality control.
