Quick Take
Summary is AI generated, newsroom reviewed.
Tesla’s board is considering a leadership transition, prompted by CEO Elon Musk’s political involvement and a 71 per cent drop in earnings, per a report. Investor unease has risen due to stock decline and Musk’s focus away from core operations.
Tesla’s board is actively considering a leadership transition as early as March this year, according to a report. This comes at the heels of a sharp decline in the electric vehicle maker’s stock and mounting investor unease over CEO Elon Musk’s increasing involvement in political affairs, The Wall Street Journal reported on April 30, citing sources familiar with the matter.
The board’s concerns were reportedly triggered by Musk’s deepening engagement with the Donald Trump administration, where he has taken a leading role in the White House’s Department of Government Efficiency (DOGE). While discussions around succession plans are serious, the progress remains unclear, the report added.
Tesla’s stock has seen a turbulent year, plunging as much as 45 per cent before showing some recovery alongside broader market gains, according to a CNN report. The prolonged slump in share price appears to have tested the patience of board members, particularly as Musk devoted increasing time to government duties rather than core business operations, CNN reported.
Last week, in response to rising criticism, Musk said he would scale back his responsibilities in Washington and redirect his attention to his businesses.
The move followed backlash from investors who have grown frustrated with the Tesla CEO’s work at DOGE, where he has overseen controversial job-cutting initiatives within the federal workforce, reported Reuters.
At the same time, Tesla’s vehicle lineup has aged without major refreshes, and sales have continued to decline. Musk’s outspoken support for far-right political movements in Europe has triggered protests and vandalism targeting Tesla showrooms and charging stations across the United States and Europe, according to the same report.
According to WSJ, Tesla’s board members met Musk, urging him to make a public commitment to focus more on Tesla. It remains unclear whether Musk – who also sits on the board – was aware of the succession plan.
Tesla’s financial performance has added further urgency to the situation. The company posted a staggering 71 per cent drop in first-quarter earnings, with sales and profit taking a substantial hit. The earnings announcement, made last week, coincided with Musk’s declaration that he would step back from his government role and return to Tesla.
The board’s internal efforts suggest that while no formal transition appears imminent, Tesla’s leadership is preparing for potential changes amid a volatile mix of political distraction, weak earnings and shaken investor confidence.
