Tesla Board Backs Elon Musk's Leadership Amid Rumours They're Looking For His Replacement

Tesla's Q1 2025 earnings per diluted share fell to £0.09 ($0.12) from £0.31 ($0.41) a year earlier as revenue declined markedly year-over-year to £9.68 billion ($12.93 billion) from £12.33 billion ($16.46 billion). Shares are down 30% year-to-date as investors believe CEO Elon Musk is stretched too thin with his business and political roles.

As the EV maker continues to face backlash over Musk's government policies, reports emerged that Tesla is looking for a new CEO. On Wednesday, The Wall Street Journal reported, citing sources, that Tesla's board has contacted multiple executive search companies to begin a formal process of finding a CEO to replace Musk. According to people familiar with the matter, the Tesla board has also been looking for an independent director.

The report said it was not clear if Musk was aware of these efforts or whether his recent disclosure that he wants to return to Tesla full-time has put off the search for his successor.

Tension at the board heightened after Q1 results revealed sales and profits were on a rapid decline as Musk juggled multiple business ventures and time in Washington.

The eight-person Tesla board reportedly told Musk he needed to spend more time at Tesla, and he had to say that publicly. Musk did so during the earnings conference call. 'Starting next month, I'll be allocating far more of my time to Tesla, he said.

During a recent cabinet meeting, US President Donald Trump thanked Musk for his work at the Department of Government Efficiency. 'You know you're invited to stay as long as you want,' Trump said. 'I guess he wants to get back home to his cars.'

Tesla bull Wedbush's Dan Ives even slashed the brokerage's 12-month stock price target by a whopping 43%. 'This situation is not sustainable and the brand of Tesla is suffering by the day as a political symbol,' he said in early April.

Tesla Board Refutes Rumours

The Tesla stock tanked 4% in after-hours trading after The Wall Street Journal report was published. However, the stock marginally recovered during Thursday's pre-market hours after the Tesla board, led by chair Robyn Denholm, rejected the media reports. The automaker, which rarely publicly comments on media reports, denied the rumours in a post on X, formerly Twitter.

'Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company,' the Tesla board wrote.

The post went on to say that the report is absolutely false and that this view was communicated to the media before the report was published.

Tesla also said the board continues to back CEO Elon Musk, and it 'is highly confident in his ability to continue executing on the exciting growth plan ahead.'

Musk reportedly confided to someone close last year that he was frustrated to be working nonstop at the EV maker. Musk even went ahead to say he no longer wanted to be Tesla CEO, but was concerned no one could replace him.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.