Tesla denied reports the company’s board has begun searching for a replacement for CEO Elon Musk. The South African-born entrepreneur has come under increasing fire due to his ties to the Trump administration, leading to a sharp slump in Tesla sales and earnings and calls by some leading investors to find a new chief executive. Headlight.News has the latest.
Tesla Chair Robyn Denholm called “absolutely false” a report the company wants to replace CEO Elon Musk.
Tesla Chairman Robyn Denholm took to the company’s official page on X early Thursday to deny reports that the board of directors has begun looking to replace CEO Elon Musk.
Denholm was responding to a story posted Thursday evening by the Wall Street Journal reporting that some board members had grown “irritated” about Musk’s involvement in the Trump administration and had reached out to recruitment firms seeking a potential successor.
“This is absolutely false (and this was communicated to the media before the report was published),” Denholm wrote on X. But the WSJ report highly growing concerns about Musk’s increasingly negative effect on Tesla, with several lead investors now suggesting it is time for him to leave the company.
From hero to zero
Once hailed as a hero by environmentalists and others on the political left, Elon Musk’s image has changed dramatically since he took over the social media site then known as Twitter in October 2022, all the more so since he began pumping money into Donald Trump’s 2024 presidential campaign and then signed on as head of the new administration’s Department of Government Efficiency, or DOGE.
That has triggered a backlash, contributing to a sharp slump in Tesla sales – down 45% in Europe during the first quarter – while earnings tumbled more than 70% during the first quarter of this year. And though the carmaker’s stock price has rebounded from its early-March low, it’s still off more than $200 a share from the $488.54 high set in mid-December.
That has triggered growing concerns on Wall Street, where Tesla’s market capitalization is off nearly $650 billion. Five weeks ago, Ross Gerber, the CEO of Gerber Kawasaki, and a traditional Tesla bull, told Newsweek it was “absolutely” time for Musk to step down as chief executive. Several other lead Tesla investors also raised questions about whether it was time to find a replacement.
Is Musk on the way out?
Musk became a close confident of Pres. Donald Trump during last year’s campaign.
According to the Journal’s report, some unnamed Tesla board members have now heeded these concerns. “About a month ago,” it said, “with Tesla’s stock sinking and some investors irritated about Elon Musk’s White House focus, Tesla’s board got serious about looking for Musk’s successor.”
They reached out to several recruitment firms, said the report which cited “people familiar with the discussions.”
About that point, the Journal added, board members told Musk he needed to spend more time with the company – and needed to say he would publicly. “Musk,” it noted, “didn’t push back.”
Nine days ago, following release of Tesla’s dismal Q1 earnings report, Musk did just that, announcing he will be “allocating far more of my time to Tesla” starting in May.
More Tesla News
- Sales Plunging, Protests Rising, Can Musk Salvage Tesla?
- Tesla Co-founder JB Straubel Reportedly High on List of Possible Musk Successors
- Tesla Q1 Earnings Fall 70%
Is it too late?
Long-time Tesla bull Dan Ives, of Wedbush, praised Musk’s decision to refocus on Tesla.
For his part, Trump thanked Musk for his work at DOGE during a Wednesday cabinet meeting. “You know you’re invited to stay as long as you want,” Trump said. “I guess he wants to get back home to his cars.”
The move has won praise from some key Tesla stock bulls. “This is a big step in the right direction,” Wedbush Securities’ Dan Ives, said in response to Musk’s decision to refocus his time on Tesla. “Investors wanted to see him recommit to Tesla.”
But not everyone is convinced that will be enough to get the automaker back on track. Anthony Johndrow, CEO of Reputation Economy Advisors, told Headlight.News last month that Musk “has lost credibility,” especially with the sort of motorists interested in battery-electric vehicles. While the Tesla executive may have gained followers among Trump followers, they simply will not counteract the loss in demand from those on the political left.
But Johndrow cautioned that Tesla’s board faces a conundrum. “Could you replace Musk and sell more Teslas? I think so,” the corporate image specialist said. “Could you get the stock back up? I don’t think (anyone else would) justify (Tesla’s traditionally high) valuation.”
Tesla’s troubles are far from over
Musk will have to deliver for Tesla, among other things making the planned Cybercab more successful than the failed Cybertruck.
Even after announcing his shift back to Tesla, Musk has continued to face a fierce backlash with protests regularly taking place at the company’s dealerships and other facilities. And the opposition isn’t limited to the United States. PFA, the French organization that tracks the country’s automotive sales, reported Thursday that Tesla demand fell 59% in April.
While Musk has clearly become a lightning rod for automotive buyers around the world, Tesla has other challenges to face. In key markets, like Europe and China, the company is facing increasingly aggressive competition from domestic Chinese companies including BYD and Geely. In those regions, as well as the U.S., Tesla has been slow to deal with what is seen as an EV affordability crisis. Even traditional competitors, such as General Motors, Hyundai and Kia, have been undercutting Tesla on price. The Texas-based automaker has repeatedly delayed its “affordable” entry, though it’s now set to debut around mid-year.
For his part, Musk has downplayed Tesla’s weakening vehicle sales, promising that it will more than make up for that by entering new high-tech sectors. It’s also set to debut its driverless Cybercab in the coming months, and is getting ready to launch the humanoid Optimus robot.
“The Board is highly confident in his ability to continue executing on the exciting growth plan ahead,” Chairman Denholm said.
Whether Tesla can deliver on time – always a problem for the company – and overcome opposition to Musk when those products do come out is uncertain, however. Any further setbacks, observers suggest, could put more pressure on the Tesla board to consider whether it’s time for Musk to go.
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