Elon Musk needs to soothe investor fears over his Twitter saga as Tesla faces one of the most important moments in the history of the company, Wedbush says

• Tesla's earnings report on Wednesday will be one of the most important moments in its history, Wedbush said.

• Wedbush says Tesla stock has upside in 2023, but Elon Musk needs calm investors over his chaotic Twitter takeover.

• His revamp of Twitter has damaged Musk's image and the CEO needs to regain trust.

Elon Musk needs to soothe investors' fears over his wild Twitter saga as Tesla heads into its fourth-quarter earnings on Wednesday, a moment that marks one of the most important moments in the car maker's history, according to Wedbush.

"While every quarter is important for Tesla we would highlight this upcoming call and guidance commentary as one of the most important moments in the history of Tesla and for Musk himself," Wedbush's Dan Ives said, noting that Tesla faces higher competition and a more dire macroeconomic outlook than ever before. What's more, Elon Musk is struggling against his own negative headlines surrounding the Twitter saga, which he will have to address for investors to get comfortable with the stock again.

"With all the worries about Musk's attention on Twitter, selling Tesla stock, [naming] a new CEO, and other noise created by this ongoing soap opera … Elon needs to give investors comfort around this tight wire balancing act and reiterate his goals for the year and lay out the strategic vision despite a near-term dark macro," the note added.

The company's stock tanked 65% in 2022 amid rising inflation, a strong dollar, and high interest rates. The sell-off was exacerbated by Elon Musk's chaotic takeover of Twitter, which involved dumping over $40 billion of his own Tesla shares.