Tesla Board Quietly Exploring Leadership Succession
Roughly a month ago, with Tesla’s stock sliding and investor concerns growing over Musk’s attention to Washington politics, the company’s board began actively exploring CEO succession.
Board members have contacted multiple executive search firms as Tesla continues to face sliding sales and profits, while Musk spends much of his time in political and advisory roles in Washington.
In a recent meeting, the board pressed Musk to commit more time to Tesla and to do so publicly. Musk didn’t resist the request. After announcing a 71% decline in Q1 profit last week, Musk told investors he would “spend significantly more time at Tesla starting next month.”
While the board has reportedly focused on top-tier search firms, it’s unclear how advanced the succession planning process is — or whether Musk himself is fully aware of it. In a Wednesday cabinet meeting, Trump thanked Musk for his public service and commented that he "seems ready to return to his cars."
Tesla’s 8-member board is also considering adding new independent directors and has been engaging with major shareholders to reassure them of the company’s direction.
Brand Pressure Mounts Amid Political Fallout
Musk’s deeper involvement in politics comes at a difficult time for Tesla. For the first time in over a decade, EV sales declined in 2024. Aggressive price cuts have squeezed margins. Meanwhile, Musk’s growing association with Trump has damaged the Tesla brand among environmentally conscious consumers, and Trump’s new tariff measures are complicating Tesla’s supply chain and China strategy.
Though Tesla shares initially rallied after Trump’s election win, the stock has since fallen from its $1.5 trillion peak to a $900 billion valuation.
Musk reportedly told a close contact early last year that he wanted to step away from the CEO role but struggled to identify a successor who could carry his long-term vision forward.
Internal Strains & Employee Reactions
Despite owning 13% of Tesla, Musk has repeatedly complained about not drawing a salary for over seven years. The board recently formed a special committee to evaluate executive compensation.
Tesla is only one of five companies Musk actively leads. Over 20 senior executives across these businesses report directly to him.
Some Tesla employees have actually welcomed Musk’s absence from day-to-day operations. But his political pivot has raised new concerns — particularly among staff committed to Tesla’s mission on climate action and sustainable energy.
His alignment with Trump has begun to hurt Tesla in progressive markets like California and Germany, while ceding share to Chinese rivals like BYD. One Tesla executive who privately suggested Musk’s departure might benefit the company was reportedly dismissed.
Core Business Weakens as AI Ambitions Grow
Tesla is at a transitional moment. While its ambitions in AI and robotics grow, its core EV business is struggling. The Cybertruck has missed its first-year sales targets, and the company is focusing on improving its existing product line rather than launching a low-cost model in 2025.
In last week’s earnings report, Tesla posted a 9% drop in total revenue and a 20% plunge in automotive revenue. Musk responded to concerns by downplaying the severity of Tesla’s situation, saying, “We are not at the edge of death — not even close.”
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