- Elon Musk has some explaining to do at next week's earnings call, Wedbush's Dan Ives said.
- The last few months have been a "horror show," with the carmaker announcing fresh layoffs on Monday.
- "We need to hear the rationale for the cost cutting, the strategy going forward, product roadmap, and an overall vision from Musk."
Elon Musk needs to explain the latest layoffs at Tesla in order to regain investor confidence after an intensely difficult few months for the electric car company, according to Wedbush analyst Dan Ives.
Ives pointed to Monday's announcement of job cuts at Musk's carmaker, with Tesla laying off 10% of its global staff on, per a memo seen by Business Insider. Those cuts come shortly after the company posted disappointing figures over the past quarter, with deliveries sliding 20% from levels last year.
Amid the layoffs, high profile executive including Drew Baglino, Tesla's former senior vice president of powertrain and electrical engineering, and Rohan Patel, Tesla's former vice president of public policy and business development, have also departed.
The loss of Baglino in particular, is an "absolute gut punch" for Tesla, Ives said, given his involvement in developing Tesla's Model 2.
"The Street wants and NEEDS answers next week on Tesla's 1Q conference call next Tuesday, April 23rd after the bell as the string of bad news over the last few months has been a horror show for investors in the Tesla story," Ives wrote.
Failure to explain what's going on and to soothe Wall Street's worries could result in Tesla losing the support of investors, Ives said.
"We need to hear the rationale for the cost cutting, the strategy going forward, product roadmap, and an overall vision from Musk otherwise many investors might head for the elevators during this Category 5 perfect storm of weak demand Tesla is seeing globally in 2024."
Tesla sentiment among Wall Street analysts has soured amid weak demand for its vehicles, especially in China. The shares are down 35% since the start of the year, while a slew of banks have slashed their price target for the carmaker.
Wedbush said it maintains its "outperform" rating for Tesla and reiterated its $300 price target for the stock. That implies an 83% upside from levels on Monday, but the firm's forecast assumes Musk is able to regain control at the company while reining in his "distractions," Ives said in a note earlier this month.