Elon Musk's return to Tesla, heralded as a potential lifeline for the struggling electric vehicle giant, has instead sparked a firestorm of doubt. Wall Street analyst Gordon Johnson of GLJ Research delivered a devastating verdict, claiming the damage inflicted on Tesla's brand is "100% irreversible."
This searing pronouncement, reported by The Cool Down, points to Musk's polarizing political involvement, particularly his role in the Trump administration's Department of Government Efficiency (DOGE), as the primary culprit.
Tesla's first quarter of 2025 was catastrophic, with a 71% plunge in net income and a 9% revenue drop, marking the largest sales decline in its history. Protests outside showrooms and vandalism at facilities reflect a growing backlash against Musk's political antics, alienating environmentally conscious consumers who once championed Tesla's mission.
Even Wedbush Securities' Dan Ives, a longtime Tesla bull, warned of a "brand crisis," estimating a 10% loss of Tesla's global customer base, potentially 20% in Europe.
Musk's promise to refocus on Tesla, scaling back his DOGE commitments, has failed to quell fears. Analysts argue his political baggage has tarnished Tesla's image beyond repair, with Chinese consumers turning to domestic rivals like BYD and NIO. New York lawmakers' push to strip Tesla's dealership licenses further compounds the company's woes.
Johnson's grim forecast paints Tesla as a cautionary tale of hubris, where Musk's larger-than-life persona has eclipsed the brand's core values. With stock prices cratering 50% from their peak and tariffs looming, Tesla faces a precarious future. The question now is whether Musk can salvage his empire or if Tesla's decline is, as Johnson claims, truly irreversible.
Are they right?