By Charles Switzer
3:15am PDT, May 2, 2025
Tensions Mount Over Musk's Involvement in Tesla
Tesla's board reportedly became increasingly concerned about
Elon Musk's divided attention between the company and his involvement with the
Donald Trump administration,
The Wall Street Journal reported on Wednesday, April 30.
With Tesla's stock dipping and concerns mounting about Musk's focus on his government work, the board decided to begin planning for a potential leadership change. According to sources familiar with the discussions, Tesla board members reached out to executive search firms to explore the possibility of finding a successor for Musk.
On Thursday, May 1, Tesla chair
Robyn Denholm denied the reports, according to
Reuters.
Here's everything you need to know about Musk's possible Tesla mutiny.
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Musk's Response and Pledge to Return to Tesla
Amid growing frustrations, Elon Musk met with Tesla's board, which reportedly told him he needed to dedicate more time to the company, urging him to publicly acknowledge his commitment, The Wall Street Journal reported.
Musk did not push back against these demands. He pledged to refocus on Tesla, and during an earnings call, he promised to spend more time at Tesla starting in May.
"Starting next month, I'll be allocating far more of my time to Tesla," Musk said, signaling his intent to prioritize the company again.
Tesla's Struggles and Musk's Government Work
Tesla has been facing a series of challenges including declining sales and profits.
Elon Musk's increased time spent in Washington, D.C., working for the Department of Government Efficiency (DOGE) did not help matters.
DOGE, an initiative focused on reducing federal jobs and cutting government spending, has drawn significant attention for its controversial approach, especially among Tesla investors who have grown concerned about Musk's political involvement impacting the company's performance.
Additionally, Tesla has struggled in critical markets like California, China and Germany, with declining brand appeal.
The Denial of Succession Planning
Despite growing concerns within Tesla about Elon Musk's focus on government work, Tesla's board has denied reports that they have begun actively seeking his replacement.
Robyn Denholm took to social media on Thursday to deny the reports claiming the board had reached out to executive search firms, saying the report was "absolutely false."
She emphasized that the board has "high confidence" in Musk's ability to "continue executing on the exciting growth plan ahead." Musk also criticized the article, calling it a "deliberately false article."
Competition and New Ventures Amid Declining Sales
Tesla faces growing competition in the electric vehicle (EV) market.
As sales of its popular Model 3 and Model Y cars decline, Elon Musk has shifted his focus from affordable EVs to autonomous vehicles and robotics. This pivot includes Tesla's efforts to develop self-driving taxis and humanoid robots, with plans to open up a robotaxi service in Austin, Texas, by the end of June.
While these new ventures hold promise, they are also risky, and Tesla's core business in EVs remains under pressure.
Investor Concerns and Board Reassurance
Despite Elon Musk's commitment to focus on Tesla, some investors remain skeptical about his ability to balance his government work with his responsibilities at the company.
To address these concerns, several Tesla board members including co-founder JB Straubel have been meeting with major investors to reassure them that the company is in capable hands.
The board has also been exploring the possibility of adding an independent director to provide additional oversight.
The Future of Tesla and Its Leadership
Tesla's leadership remains a contentious issue, with ongoing debates about Elon Musk's management style and his focus on expanding Tesla into new areas like AI and robotics.
Some critics of the board argue that Tesla's governance lacks independence and that Musk's influence over the company needs to be checked.
As the company faces increasing competition and internal challenges, its future leadership remains uncertain, with Musk's leadership and vision playing a central role in determining Tesla's direction in the coming years, according to analysts.
