Elon musk faces critical 'battle' as Tesla profit drops

Tesla’s  (TSLA)  profit dropped 71 percent in the first quarter, marking yet another hurdle for the company as criticism of Elon Musk intensifies. Michele Schneider, chief strategist at MarketGauge, joined TheStreet to discuss the major challenges ahead for the company.

Related: Elon Musk’s eye-popping remarks cheer up Tesla investors

Full Video Transcript Below:

MICHELE SCHNEIDER: Well yeah I mean, it was a massive miss on the earnings. And yet the stock went up because Elon Musk is talking about a software future, which we know Tesla is certainly ahead of everyone else. And more importantly, talking about leaving Doge to pay more attention to the company. But even that, I don't know if I would necessarily bank on that. So I think unless Tesla gets through 280, because that's the area it really broke down from, I would be more hesitant for a long term buy at this point, unless the stock really crashes, in which case, if it gets closer to 150, which it can do, maybe then we can start thinking about it. Right now, I think you're in the middle of a chop fest and again, very news sensitive without the fundamentals, basically to really prove that this stock has bottomed.

And we know sometimes Tesla goes up in spite of poor sales or whatever, but he still has a couple of things that he can't control. Number one is China. And the tariffs. Right that hasn't really been worked out. China was a big audience for Tesla. Now BYD is actually taking over in terms of sales. And number two is with Doge itself. The idea was to really cut government spending, and it hasn't really accomplished that job, nor has bringing in money from tariffs accomplished that job. So it really goes back to the consumer. Can consumers actually afford a Tesla if we head closer to recession number one, and without the credits from the government to buy EVs, what are consumers going to do in terms of putting up that money. So I think he's got a kind of a battle to overcome here.