Tesla bull says growth story still intact and 'catalysts' remain despite Musk antics

One of Wall Street’s most bullish analysts thinks Tesla’s (TSLA) growth story is still intact and, despite a raft of negative headlines for CEO Elon Musk, upside “catalysts” remain.

Writing in a note to clients on Monday, Wedbush’s Dan Ives notes Tesla stock has been under pressure for a “myriad of reasons” this year following a massive run-up after President Trump’s win in November.

Along with EV demand issues, Musk’s heavy involvement with the Trump White House and his influence broadening into the DOGE (Department of Government Efficiency) initiative has created a “visible perceived downside impact weighing on Tesla shares,” Ives said.

As head of DOGE, Musk has been behind massive layoffs of government employees. Many of these dismissals are the subject of lawsuits alleging DOGE and the White House acted illegally with the firings. Recent surveys show that many voters disapprove of Musk’s actions, with a Quinnipiac poll from late January finding that voters oppose Musk playing a prominent role in the Trump administration by a 53% to 39% margin.

Despite the polling, Ives believes Musk’s negatives aren’t a larger issue for Tesla. “We view this as containable brand issues for Tesla for now that are not a major cause for concern,” Ives said.

The Wedbush analyst believes that a new vehicle launch, refreshed Model Y sales, and unsupervised FSD (full self-driving) in Austin, Texas, will be “key events and catalysts” for Tesla.

Tesla plans to reveal its long-awaited cheaper EV (sub $30,000) this year. Ives expects a lower-cost EV from Tesla to hit the roads “prior to July,” saying it would be a much-needed “growth catalyst” for global deliveries.

The new Model Y, starting sales in the US in March and already available in China, will be key to “unlocking some demand” in these key regions, the analyst said. Tesla’s Q4 deliveries were a disappointment for investors.

But the biggest bet on Tesla is still autonomous driving with FSD and robotaxis.

“The holy grail for Tesla and Musk is around autonomous and FSD looking ahead,” Ives said, adding that Musk’s bet on the White House will “lay the groundwork for a federal autonomous roadmap which we believe unlocks a $1 trillion of valuation alone.” Musk said during the Q4 earnings call that paid, unsupervised FSD was coming to Austin in June.

With the growth story unchanged in his view, Ives maintained his Outperform rating for Tesla and $550 price target.

Ives’s positive take comes after a rocky ride for Tesla shareholders to start the year. Tesla stock is down 19% year to date, and a brief uptick following the company’s earnings report late last month was short-lived. Events like Tesla protests, though sporadic, also tend to show a brand with rising negatives.

Tesla’s next disclosure will be Q1 global deliveries coming in early April; a weak report would be the first big sign that the Tesla brand is in trouble.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.

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