Sunita Somvanshi
A Wall Street Journal report asserting that Tesla’s board was searching for Elon Musk’s replacement has triggered strong denials and raised concerns about the electric vehicle manufacturer’s strategic direction. The May 1st WSJ piece claimed that Tesla’s board reached out to executive recruitment agencies approximately one month ago to identify Musk’s potential successor. The reported search coincided with Tesla’s stock plunge and growing investor concerns about Musk’s split focus between Tesla and his role in the Trump administration’s Department of Government Efficiency (DOGE).
“Absolutely false,” Tesla board chair Robyn Denholm stated firmly on X, adding this denial was communicated to the WSJ before publication. “The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead.”
Musk himself responded with characteristic bluntness: “It is an EXTREMELY BAD BREACH OF ETHICS that the @WSJ would publish a DELIBERATELY FALSE ARTICLE and fail to include an unequivocal denial beforehand by the Tesla board of directors!” He later added: “WSJ is a discredit to journalism.”
Financial Troubles Mount
The leadership controversy comes amid serious financial challenges. Tesla’s Q1 2025 results showed:
- Total revenue fell by 9% to $19.34 billion, falling short of the $21.11 billion analysts had predicted
- 20% decline in automotive revenue to $14 billion
- 71% plunge in net income to $409 million (12 cents per share)
- Stock price down over 30% year-to-date
Tesla attributed the revenue decline to production line updates for a refreshed Model Y SUV, lower average selling prices, and sales incentives.
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Political Entanglements
Musk’s DOGE role has become increasingly problematic for Tesla. During a recent earnings call, he admitted: “There’s been some blowback for the time that I’ve been spending in government with DOGE.” He promised to scale back to “just one or two days a week starting in May.”
A Morgan Stanley survey revealed 85% of Americans believe Musk’s political views are hurting Tesla. His alignment with far-right political movements in Europe has allegedly triggered demonstrations and property damage at Tesla retail locations and charging facilities throughout the United States and Europe.
Board Independence Questions
Critics have raised concerns about Tesla’s board composition, which includes members with close personal ties to Musk, such as his brother Kimbal Musk and James Murdoch. Senator Elizabeth Warren has called for SEC investigation into potential conflicts of interest, citing issues like Tesla resources being redirected to Musk’s private companies.
Global Competition Intensifies
The company is reportedly shifting strategic focus toward autonomous vehicles and AI technologies, raising questions about alignment with Musk’s current leadership priorities.
Whether Tesla’s board sought a new CEO or not, one thing remains clear: The company faces a critical juncture as it navigates leadership questions, political fallout, financial pressure, and intensifying global competition.
