Carvana Climbs as Tesla Stumbles: Analysts Call for Musk to Refocus and Back Used Car Giant’s Growth Potential

Tesla (TSLA) is facing a critical juncture, with its stock plummeting nearly 50% since December.

Wedbush Securities analyst Dan Ives, a long-time Tesla bull, has issued a stark warning: Elon Musk must refocus on the automaker to steer it out of its current crisis. Musk’s dual role as CEO of Tesla and head of the White House Department of Government Efficiency (DOGE) has drawn sharp criticism, with many arguing that his political involvement is tarnishing the Tesla brand.

While Musk’s leadership has always been a polarizing topic, the recent downturn has intensified scrutiny. Ives emphasized that Musk must formally announce a balanced commitment between DOGE and Tesla. Investors are seeking reassurance that the CEO remains dedicated to Tesla’s future, particularly as the company battles declining sales and mounting competition.

Roadmap for Affordable EVs: A Critical Demand
Beyond Musk’s political entanglements, Tesla faces mounting pressure to deliver on its promise of affordable electric vehicles. The much-anticipated low-cost EVs are slated for production in 2025, with reports suggesting a simplified Model Y variant may hit the Chinese market first. However, with competitors like General Motors and Ford ramping up hybrid production and other EV makers gaining market share, Tesla’s delay in providing clear guidance is weighing heavily on investor confidence.

California regulators’ recent approval for Tesla’s Full Self-Driving (FSD) Robotaxi testing has done little to assuage concerns. While the rollout of autonomous services in Austin, Texas, is seen as a potential revenue driver, analysts warn that it remains a longer-term play. UBS analyst Joseph Spak recently maintained a Sell rating on Tesla, citing an overly ambitious price-earnings multiple of 90x for 2025 estimates.

Carvana Defies the Odds with Strategic Gains
In contrast, Carvana (CVNA) is proving resilient despite broader market volatility. The used car e-commerce platform recently earned an Overweight rating from Piper Sandler, with a reaffirmed price target of $225. Analysts highlighted Carvana’s innovative approach, which integrates digital storefronts with physical inspection centers, as a key factor behind its projected multi-year revenue growth of over 20%.

Carvana’s success also reflects the stability of the used car market, which remains relatively immune to geopolitical uncertainty and tariff concerns. While traditional automakers like Stellantis and Rivian face downgraded outlooks due to supply chain disruptions, Carvana’s streamlined operations and low market share base provide a significant runway for expansion.

The Road Ahead
For Tesla, the path to recovery hinges on decisive action from Musk. Analysts like Ives argue that a clear commitment to Tesla and a detailed product roadmap could restore investor confidence. With the company’s first-quarter earnings call on the horizon, all eyes will be on Musk’s next move.

Meanwhile, Carvana’s upward trajectory serves as a testament to the resilience of adaptable business models. As the automotive sector navigates uncertain terrain, both companies will need to balance strategic vision with market realities to maintain investor trust and long-term growth.

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