Tesla is caught between a rock and a hard place due to its close relationship with President Donald Trump, who has imposed 25% tariffs on imported vehicles. The company’s CEO, Elon Musk, has cultivated a close bond with the president, which could alienate potential customers who dislike Trump’s policies.
On Tuesday, Tesla will report earnings, and investors will be eager to know how the tariffs are affecting the company’s finances. Musk will also answer questions from investors about his role in the government and the impact of the tariffs on Tesla’s business.
Analysts warn that Musk’s continued involvement with the administration could lead to a backlash against the company. Dan Ives, an analyst for Wedbush Securities, calls this a “code red situation” if Musk continues to play a high-profile role in the Trump administration.
Tesla is facing growing competition from other EV automakers, especially in China. The tariffs have caused a significant drop in sales, with Tesla’s share value plummeting by about half since mid-December.
The company’s finances are only part of what investors will want to know. They will also be looking for reassurance on self-driving cars, a Robotaxi fleet, and plans to sell humanoid robots. Musk has made ambitious promises for these projects, but there have been no updates.
Investors are waiting for progress on these topics, which could help reverse the slide in Tesla’s share value. Ives warns that “the backlash from Trump tariff policies in China and Musk’s association will be hard to understate.”
When will Musk leave his role in the government? Protests outside Tesla showrooms and vandalism at its facilities underscore the growing tension around the company’s relationship with the administration.
The situation is a perfect storm of brand damage, tariffs, and competition. Tesla needs to find a way to escape this double trouble, or risk further losses in the stock market.
Source: https://edition.cnn.com/2025/04/21/business/musk-tesla-investors-call/index.html