Tesla Inc. (TSLA) is facing its most significant leadership reckoning yet.
According to a report from The Wall Street Journal, members of Tesla's board initiated quiet conversations with executive search firms nearly a month ago to explore potential successors to CEO Elon Musk. This move, undisclosed until now, was reportedly triggered by Musk’s deepening entanglement with the Trump administration and the increasing strain his political affiliations are placing on Tesla’s brand, performance, and shareholder confidence.
Whether Musk was informed of these succession efforts remains unclear. What is evident, however, is growing concern among board members—some of whom, like Chair Robyn Denholm, have come under fire for perceived deference to Musk—about the company's future under his leadership. The eight-person board, which includes Musk's brother Kimbal and James Murdoch, is reportedly also considering adding a more independent voice as Tesla’s trajectory becomes increasingly volatile.
Musk recently promised to "significantly cut back" his time spent at the Department of Government Efficiency (DOGE), a Trump administration initiative he helped establish, to focus more on Tesla. But investors and board members alike remain skeptical of that pledge, especially given Musk’s erratic track record and his ongoing leadership role at X, formerly Twitter.
Sales Slump, Stock in Retreat: A Crisis in Confidence
Tesla’s stock, already down 3.38% this week, has been battered throughout 2025. Shares have plunged more than 45% before rebounding modestly, and first-quarter earnings offered little relief. Profit dropped a staggering 71% year-over-year. Deliveries declined 13%, with European sales collapsing by nearly half in the first two months of the year.
The stock has effectively round-tripped since Trump’s November election win, swinging from post-election optimism to a post-inauguration slide. Fairlead Strategies analyst Katie Stockton described the price action as “range-bound,” suggesting that investors are waiting for clear evidence that Tesla’s pivot toward AI and robotics will start generating real revenue.
That shift—from electric vehicles to driverless taxis and humanoid robots—has become Musk’s new pitch to investors. A robo-taxi service in Austin is slated to launch in June, but skepticism remains high. Even long-time Tesla bull Ross Gerber criticized the company’s recent marketing blitz—discounts, 0% financing, and bundled Full Self-Driving features—as desperate measures rather than strategic innovation.
"This is the worst performance I’ve seen in Tesla’s history," Gerber said during a Schwab Network interview. "Elon’s distracting everyone with robots and TAMs, but the facts are the facts.”
A Brand Under Siege: The Fallout from Musk’s Politics
Tesla’s brand, once synonymous with environmental progress and innovation, is now mired in controversy. Musk’s political positioning—particularly his support for Trump and far-right parties in Europe—has sparked global protests and vandalism at Tesla showrooms and charging stations. The company is also caught in the crossfire of an escalating trade war with China, a key market where its sales are now under serious threat.
Internally, morale appears shaken. Musk has reportedly told confidants he no longer wants to serve as CEO, worried that his successor might abandon his grand vision for autonomous vehicles—but apparently willing to step aside nonetheless. Meanwhile, activist investors continue to hammer the board for its lack of independence, questioning whether Denholm and others are fit to oversee a company so tightly controlled by one man.
Tesla CFO Vaibhav Taneja acknowledged that the controversy surrounding Musk has materially hurt sales. “The negative impact of vandalism and unwarranted hostility towards our brand and our people had an impact in certain markets,” he said on last week’s investor call.
At a time when Wall Street is demanding financial discipline and operational clarity, Tesla remains distracted by politics, personal brand crises, and uncertain leadership. Musk’s critics argue his time in government has come at a steep cost: an alienated customer base, declining profits, and a stock price that increasingly reflects doubt, not belief.
With Tesla expected to meet high earnings expectations later this year to avoid a further stock rout, the stakes could not be higher. Whether the board’s quiet succession planning turns into a full-fledged leadership overhaul—or whether Tesla’s future is still tied to Musk’s ever-expanding empire—remains an open question. But for investors, the margin for error is shrinking fast.
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