Tesla’s Board of Directors and CEO Elon Musk fervently deny claims that the electric vehicle giant is seeking new leadership, despite concerning financial performance and speculation about Musk’s divided attention.
At a Glance
- The Wall Street Journal reported Tesla’s board contacted executive search firms to find a successor for Musk, causing a temporary stock price drop
- Board Chair Robyn Denholm and Musk both vigorously denied the report, with Musk calling it “unethical” and “false”
- Tesla faces significant financial challenges with Q1 2025 revenue down 9% year-over-year and automotive revenue dropping 20%
- The company’s net income has plummeted 71% compared to last year, with shares down over 30% since the start of 2025
- Concerns persist about Musk’s focus on Tesla while he works with the Trump administration’s Department of Government Efficiency (DOGE)
WSJ Report Sparks CEO Replacement Controversy
Tesla and CEO Elon Musk pushed back forcefully against a Wall Street Journal report claiming the company’s board has begun searching for his replacement. The disputed report alleged that Tesla’s board had contacted executive search firms to identify potential successors to Musk, a claim that sent the automaker’s already-struggling stock into a brief tailspin. The Journal suggested the search was prompted by concerns over Musk’s involvement with President Trump’s administration, specifically his role co-leading the Department of Government Efficiency.
Tesla Board Chair Robyn Denholm issued a clear denial, stating: “To be crystal clear, there is no CEO search for Tesla underway, nor has one been authorized by the board.” Musk himself took to social media to blast the report as “completely false” and questioned the ethics of the publication. This public disagreement highlights the intense scrutiny facing both Tesla and its controversial chief executive during a challenging period for the once high-flying electric vehicle manufacturer.
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— trap_zack (@ZackEiseman) April 1, 2025
Financial Struggles Mount for Tesla
Behind the CEO controversy lies a concerning financial picture for Tesla. The company reported alarming first-quarter results for 2025, with overall revenue falling 9% compared to the previous year. More troubling for investors, automotive revenue – Tesla’s core business – plunged 20%. The decline stems from a perfect storm of challenges: lower selling prices, increased sales incentives to move inventory, and temporary factory shutdowns that hampered production capacity during the quarter.
The financial impact has been severe. Tesla’s net income dropped a staggering 71% compared to the same period last year, reflecting both declining sales and compressed profit margins. Shareholders have felt the pain directly, with Tesla stock down more than 30% since the beginning of 2025. This performance stands in stark contrast to the company’s meteoric rise during previous years when it commanded an ever-growing premium among investors excited about its perceived technological advantage and growth potential.
Questions About Leadership Focus
While Tesla’s board maintains public confidence in Musk’s leadership, questions persist about his divided attention. Beyond his Tesla responsibilities, Musk now balances leadership roles at several other high-profile companies including SpaceX, X (formerly Twitter), Neuralink, and The Boring Company. His new government role with the Trump administration adds another substantial commitment to an already packed schedule, prompting some investors to question whether Tesla receives sufficient leadership focus during its challenging financial period.
Despite these concerns, Tesla’s board appears to be standing firmly behind Musk. Denholm’s statement expressed “great confidence in the Tesla management team,” suggesting the board believes current leadership can navigate the company through its current difficulties. For his part, Musk continues to promote Tesla’s future prospects, particularly emphasizing autonomous driving technology and the company’s robotaxi ambitions as key growth drivers that will eventually overshadow current production and sales challenges.
As Tesla works to address its financial and operational challenges, the controversy over the Wall Street Journal report has created additional uncertainty for investors already concerned about the company’s direction. Whether Musk can successfully balance his multiple commitments while returning Tesla to growth remains one of the most closely watched questions in American business.
