TSLA Stock Alert: Does Tesla Need a New CEO?

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Tesla (NASDAQ:TSLA) stock has been falling lately, possibly due in part to one of its projects. Tesla Dojo — the “supercomputer designed to train machine learning models used in Tesla’s autopilot software” — first caught attention when it tripped the power grid in Palo Alto, California in October 2022. While fans of the technology saw this as a testament to the device’s power, some experts have since raised concerns regarding its potential.

Recently, one analyst issued a damning take on the project, painting it as highly disorganized and mismanaged. According to Trip Chowdhry of Global Equities Research, “the problems with Dojo AI are plenty” and it would “take a whole day to list them.” The analyst’s solution? Running Tesla Dojo as a separate business unit with its own CEO — somebody who isn’t Elon Musk.

While these criticisms may not be pushing TSLA stock down directly today, Chowdry’s statements do raise an important question: Would the entire company be better off under new leadership?

TSLA Stock and Tesla Dojo

Ever since Tesla narrowly missed Wall Street estimates for first-quarter earnings, the company has been struggling to gain momentum. Of course, Cathie Wood has issued a highly bullish price target for TSLA stock, which she attributed to the company’s potential in the robotaxi field. But her stance that hasn’t done much to boost shares. That may be because Tesla’s autonomous driving (AD) technology is nowhere near ready to help Tesla corner the robotaxi market.

Dojo is at the core of Tesla’s artificial intelligence (AI) and self-driving initiative. Given the high number of crashes that have been linked to Tesla’s AD tech, however, it clearly isn’t working as well as it should be. In fact, Chowdry believes that Tesla’s Dojo has “zero” chance of succeeding as it stands:

“If investors don’t see an immediate course correction in Dojo AI, sadly Investors will have to remove Dojo AI from their investment thesis on TSLA.”

So, Chowdry believes Tesla Dojo needs to be led by someone else. But at this point, Tesla may be better off if the entire company is in the hands of someone new. Ever since Elon Musk took over Twitter, TSLA stock has gradually trended downward. Shares have lost more than 50% over the past 12 months.

Musk has made it clear he’s more focused on Twitter than Tesla, but even when he is zeroed in on the electric vehicle (EV) company, things haven’t gone well. Multiple rounds of price cuts did not lead to the sales Tesla needed to come out ahead in Q1. Meanwhile, competition continues to increase and other EV producers are offering investors more promise than Tesla.

The Road Ahead

Tesla is still the de facto leader of the EV race, maintaining a sizable share of the market. It’s also true, as Cathie Wood noted, that the company could conquer the robotaxi space if it can demonstrate significant process with its AD tech.

For all of its resources, though, Tesla continues to fall behind while the competition closes in. And all the while, TSLA stock is struggling to make up ground. Chowdry may think that Tesla Dojo needs a new CEO, but the case for the entire company needing one is only growing stronger.

On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.

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