As Tesla’s shares plummeted nearly 40% in 2024, signaling deepening crises, Dan Ives of Wedbush Securities warns that “the clock has struck midnight” for CEO Elon Musk to steer the company through its most turbulent phase. This stark prognosis comes when Tesla confronts a barrage of challenges threatening to destabilize the pioneering electric vehicle (EV) maker.

Speaking to Yahoo Finance, Ives described the current predicament as a “Category 5 storm,” the worst he has seen in years. “Tesla is undergoing a significant test,” Ives noted. “Elon Musk needs to navigate this storm with the understanding he showed in similar crises in 2018 and 2020. Anything less could exacerbate investor concerns that are already peaking.”

The analyst’s comments reflect a broader sentiment of uncertainty that has gripped major shareholders. Tesla’s performance this year has eroded confidence and amplified calls for strategic clarity and mature leadership. Ives’s metaphor of the situation evolving from a “Cinderella story, magic carpet ride to a bit of a horror show” captures the dramatic reversal in Tesla’s fortunes.

Central to the concerns is Tesla’s ambitious bet on autonomous driving technology—a cornerstone of Musk’s strategy for the company’s future. Ives emphasized the need for a pragmatic approach: “While the promise of full autonomy is tantalizing, Tesla needs to anchor its near-term strategies in reality. This includes providing a clear roadmap for the Model 2, which is critical for maintaining growth and affordability in the EV market.”

The forthcoming Model 2, expected to be a less expensive addition to Tesla’s lineup, is vital for broadening the company’s customer base and fending off fierce competition from Chinese EV manufacturers. However, delays or shifts in focus towards more speculative technologies like autonomy could significantly deter investors looking for tangible progress.

Ives suggests that the upcoming earnings call will be pivotal. “Musk must present a convincing strategy that addresses current market dynamics and outlines specific, near-term objectives. Investors are no longer satisfied with vague assurances or distant promises of technological revolutions,” he stated.

Investors and analysts alike are calling for transparency on critical issues: production timelines for the Model 2, realistic delivery numbers, gross margins, and the integration of emerging technologies into marketable products. “The stakes are high, and the margin for error is slim,” Ives remarked. “Tesla can either solidify its leadership in the EV sector or continue to see its narrative—and market value—eroded by uncertainty and missteps.”

As Tesla approaches this critical juncture, the global automotive market watches keenly. Will Tesla recalibrate its course successfully, or is the once-touted EV frontrunner headed for a more contentious phase? The answers, as Tesla’s management addresses shareholders and the public in the upcoming discussions, could redefine the iconic brand’s future trajectory.