Musk acknowledged during Tesla’s earnings call that there had been “some blowback” over his time leading DOGE
Tesla Inc.’s chair denied a report that said board members started a search for a chief executive to succeed Elon Musk, saying directors are “highly confident” in his abilities.
The Wall Street Journal reported late Wednesday that unidentified Tesla board members had reached out to executive-search firms about a month ago, citing people familiar with the discussions. Robyn Denholm, Tesla’s chair, called the story “absolutely false.”
“The CEO of Tesla is Elon Musk and the board is highly confident in his ability to continue executing on the exciting growth plan ahead,” Denholm said via the company’s X account.
Tesla’s vehicle sales and stock price have slumped this year as Musk has devoted significant time to working for United States President Donald Trump. While the chief executive reassured some investors last week by saying he’ll allocate “far more” of his time to the carmaker, others are concerned he’s doing lasting damage to Tesla’s brand.
The French industry association Plateforme Automobile offered fresh indication of ongoing challenges for the company in Europe, reporting that Tesla had registered only 863 new vehicles in April. Sales plunged 59 per cent for the month and are down 44 per cent so far this year.
Tesla shares rose one per cent as of 8 a.m. Thursday in New York, before the start of regular trading. The stock has fallen 41 per cent from its record high reached in mid-December.
Tesla board members recently told Musk, 53, that he needed to spend more time on Tesla and announce that he would do so publicly, according to the Journal. Musk didn’t object, the newspaper said, citing unidentified people familiar with the meeting.
Musk acknowledged during Tesla’s earnings call last week that there had been “some blowback” over his time leading the so-called Department of Government Efficiency, or DOGE. After defending that work and claiming without evidence that protests against him are organized and paid for by unidentified fraudsters, he said the time had come to turn back to Tesla.
“Starting next month, I’ll be allocating far more of my time to Tesla, now that the major work of establishing the Department of Government Efficiency is done,” he said.
Musk’s detractors began targeting Tesla showrooms, vehicles and charging stations in the U.S. and Europe soon after Trump returned to the White House. At the same time, the company has been caught up in Trump’s trade war, with executives warning that tariffs will be particularly disruptive to its energy business that relies on battery cells sourced from China.
The board’s reported approach to recruitment firms will serve as a “warning shot” for Musk, Wedbush Securities analyst Dan Ives said before Denholm’s statement. Musk will remain Tesla’s CEO for at least another five years, the analyst predicted.
“We would be surprised if the board was still heading down this search path as of today,” Ives said in a note.
Other investors interpreted the Journal’s report differently.
Ross Gerber, co-founder and chief executive of Gerber Kawasaki Wealth and Investment Management, said in an interview with Bloomberg Television that the board may be offering Musk an out, allowing him to vacate the CEO role and focus more on artificial intelligence. Musk could become Tesla’s chairman instead, he said.
“I look at this as a way for him to gracefully exit Tesla,” Gerber said. “With Robyn Denholm selling all of her stock as chairman of the board, I think she’s on her way out. He becomes chairman and they find a new CEO.”
Denholm earlier this week disclosed the sale of another US$32 million of her shares and has disposed of around US$150 million of stock since December.
Gerber said Tesla co-founder and board director JB Straubel would make for a natural replacement. “Considering JB Straubel is the one talking to a lot of these investors, he’s probably the one best suited to take this role, even though he wouldn’t be an outside player,” Gerber said. “An inside player makes a lot more sense.”
Even if Musk were to leave his position, there’s no quick cure for Tesla’s ailments, Gerber said, adding he’s continuing to sell shares in the EV maker.
“Tesla is in a very vulnerable position of their own making and it’s not so simple as Elon going away,” Gerber said. “I’m still dumbfounded as to how deep a problem they’ve created. I’ve never seen any business run like this, ever.”
—With assistance from Naman Tandon and Dana Hull.
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