‘Brand tornado crisis moment’: Elon Musk’s Tesla meltdown continues with massive Cybertruck recall and ongoing stock crash

Tesla is currently on fire, and its shareholders and board are stuck inside hammering on the doors unable to escape the blaze. The root of their problem is, of course, Elon Musk, whose total embrace of Donald Trump, public Nazi salute, and generally unhinged behavior has done catastrophic damage to the EV giant’s value and reputation.

Each day brings fresh misery for Tesla. Since the inauguration we’ve seen the slow collapse of the company’s shares, which have lost a third of their value over the last month due to investor concern over Musk’s controversial activities at DOGE. Musk’s symbiotic relationship with Trump has put him squarely in the political bullseye, resulting in widespread and furious protests outside Tesla dealerships.

The unfortunate cherry on top of all this is a newly announced massive Cybertruck recall (the eighth one to date) due to a dangerous manufacturing defect. The National Highway Traffic Safety Administration sounded the alarm when it became clear that an exterior panel is affixed with the wrong type of glue, meaning there’s a high chance the piece will detach and become a road hazard.

A total of 46,096 Cybertrucks have been ordered to be recalled. Tellingly, Tesla hasn’t released sales figures for the Cybertruck, though their Q4 2024 report indicates that somewhere between 9,000 and 12,000 are on the streets. This means every single Cybertruck on the road (as well as the tens of thousands of unsold units) is objectively a danger to other motorists.

Tech and Equity Research Analyst Dan Ives – a self-described “Tesla bull” – has had enough. In a note to investors, he plainly sets out just how sticky Tesla’s situation is: “The brand damage started off as limited in our view based on our initial survey work … but now has spread globally over the last few weeks into what we would characterize as a brand tornado crisis moment for Musk and Tesla.”

Ives is practically begging for Musk to refocus his attention on Tesla: “Let’s call it like it is: Tesla is going through a crisis and there is one person who can fix it … Musk”, saying he must “take a step back and balance his DOGE and Tesla CEO roles.” This intervention is notable as Ives has spent years defending Tesla and attempting to create investor confidence in the company. But even this ardent booster appears to have had enough and needs Musk to do something – anything – to reverse Tesla’s decline.

So, will Musk ride in like a shining knight to fix everything? Given that he seems to be having the time of his life cavorting with hooting MAGA devotees over at DOGE, we suspect his attention will be elsewhere for the foreseeable future. But even if he did return that’s not a panacea for Tesla’s many underlying issues, which range from a vastly overinflated stock price, rapidly increasing competition from other EV manufacturers, widespread technical faults with their vehicles, and a rapidly deteriorating reputation.

As many have starkly pointed out, Tesla’s natural customer base should be wealthy liberals with environmental concerns. Musk cozying up to Trump, who embodies the exact opposite of those values, is rapidly driving them to the many other options. My advice, sell now as that stock price is going nowhere but down in the long term.