Tesla board searching for new CEO to replace Elon Musk: Report
Elon Musk, who campaigned aggressively for Donald Trump during his presidential campaign, has been given a special role at the White House.
Preparations are reportedly underway to replace Elon Musk as the Chief Executive Officer of his automotive company, Tesla. The Tesla board has approached several executive search firms to look for a suitable successor for the company, said a report by the Wall Street Journal citing people familiar with the discussions.
This eagerness to replace Musk at the chief executive role at his own company comes amid his White House stint and plunging Tesla stocks, the report said. The move also comes as tensions within the firm are rising due to deteriorating sales and profits, and because Musk's time is mostly being spent in Washington.
Elon Musk, who campaigned aggressively for Donald Trump during his presidential campaign, has been given a special role at the White House. He has been tasked with running the Department of Government Efficiency (DOGE), aimed to slash federal spending and make sure that all federal departments in the US are working efficiently.
Also read: Will Elon Musk have his own official Texas city called Starbase, home to SpaceX?
While the Tesla board has approached several firms to look for a suitable candidate for the big job, the focus has been narrowed to a major search firm, the report said citing people familiar with the discussions. How far the process of searching for Musk's successor has reached is not yet known. It is also not certain whether Musk, who himself is a part of the board, is aware of the big move or not.
As Tesla stocks were plunging and Musk's attention and time were unevenly divided between the firm and Washington, the board had reportedly asked him to shift his focus back to Tesla during a meeting.
Also read: Elon Musk preparing to transition out of DOGE role? Tesla boss no longer working from White House
Tesla's first-quarter profit has suffered a huge plunge of 71% this year. Following this, Musk reportedly reassured investors that he would spend more time working with the company. “Starting next month, I’ll be allocating far more of my time to Tesla,” the report quoted Musk as saying during a conference call about Tesla earnings.
US President Donald Trump also hinted at Musk wanting to return to working more with Tesla during a board meeting on Wednesday. While thanking Musk for his service at the White House, Trump reportedly said, “You know you’re invited to stay as long as you want...I guess he wants to get back home to his cars.”
Musk's proximity to Trump not only collided with Tesla's financial challenges in 2024 but also hurt his brand image. The company reportedly recorded its first annual sales decline last year in over a decade. Meanwhile, Tesla's Cybertruck was also met with ridicule and became the butt of the joke over its design.
Musk spent a whopping $250 million on Trump's campaign last year. His proximity to Trump was also being viewed as beneficial for the company. However, tensions within Tesla employees arose when Trump ramped up his anti-EV rhetoric and said that he would work to rejuvenate the oil and gas industries. They needed assurance that Musk still stood with his mission of fighting climate change and Tesla’s clean energy mission.
After Musk championed Trump's presidential campaign and has continued to work very closely with him since his second White House stint, Tesla has reportedly lost brand appeal in markets such as California and Germany. Tesla drivers put up stickers disassociating themselves with Musk's politics, the WSJ report said.
Musk on Tesla's declining profits
Tesla's overall revenue dropped by 9 per cent in the last quarter, and the revenue from its automotive business had dropped by 20 per cent following declining sales in markets such as California, Germany, and China. However, Musk has expressed optimism that Tesla's performance will improve and has announced that he will spend more time with the company. "We’re not on the ragged edge of death, not even close,” the WSJ report quoted him as saying.
