Tesla
began a search to replace CEO
Elon Musk
amid stock turmoil and negative press from the ‘First Buddy’ serving as head of the Department of Government Efficiency.
The new report comes out the same day
Donald Trump
praised Musk for his work with DOGE but may want ‘to get back home to his cars.’
However, the
Wall Street Journal
claims that his cars may not have been there for him when he got back
had he not announced his early May departure
from the
White House
.
The electric car maker sought the advice of multiple executive search firms to
begin the process of succeeding Musk, who stepped down as chairman in 2018 but has been CEO for the last two decades
.
Musk was asked by the board to make the public statement promising he would head back to his day job or face losing it, with the CEO not pushing back.
It’s unclear exactly how far they got on their search or if they’re still looking into replacing him but anonymous sources said that they had decided on a particular firm to conduct the search.
Also unknown is whether or not Musk knew anything about the search or his status within the company, which is also searching for an independent director whether Musk remains CEO or not.
The automaker’s first-quarter profits cratered 71 percent, with the EV giant pulling in $409 million compared to $1.4 billion during the same stretch last year.
Wall Street expected better — and investors are clearly growing uneasy with the once-dominant EV brand.
The company’s stock price has shed nearly 40 percent of its value since January (though, it has regained some momentum after the earnings release) when Musk started serving as head of the Department of Government Efficiency (DOGE) and being spotted everywhere with
Donald Trump
.
Tesla’s first quarter earnings conference call allowed investors to ask what they wanted of the CEO and it was clear there was only one thing on their minds.
One asked: ‘Can Elon please provide some reassurance that at some point soon he will be done with DOGE and politics? Many Tesla shareholders wish he would reprioritize the majority of his time and effort to engineering.’
‘Starting probably in next month, in May, my time allocation to DOGE will
drop significantly
,’ Musk said on the call.
However, he still plans to put in one to two days per week still helping out with DOGE, he claimed.
But ‘starting next month, I’ll be allocating far more of my time to Tesla.’
Musk admitted that his forays into politics have likely damaged his company for the time being, though he added that the global economy was also to blame.
‘This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term,’ he said.
The vibe shift around Tesla, once a crown jewel for liberal Americans, is very real.
The company sold huge amounts of electrified vehicles to tech and environmentally-minded consumers.
Tesla is largely credited for the rise in
popularity of EVs
, which represent over nine percent of new vehicle sales in the US annually.
But the company’s CEO, Elon Musk, has since pitched rightward,
spending millions on President Donald Trump’s campaign
and
backing hard-right candidates in Europe
.
That political pivot has turned off many of the progressive and centrist buyers who once lined up for Teslas.
Angry consumers have responded
with impassioned, sometimes fiery, protests at Tesla dealerships.
And,
Tesla’s sales have tanked
.
Tesla Takedown, an organization that advocates for free speech rights at the dealership protests, took victory for the revenue and sales downfalls.
‘Today’s earnings report sends a very clear message: the Tesla Takedown grassroots pressure is beginning to hit Tesla where it hurts,’ the organization said.
‘The company’s bottom line.’
Despite the hit, Tesla remains the
top-selling EV brand in the US
and the most valuable automaker in the world by market capitalization.
But investors are worried Musk is losing focus on what made Tesla a juggernaut: building innovative vehicles.
Tesla’s best-sellers — the Model Y and Model 3 — just
received some style updates.
The Cybertruck, which launched in late 2023, has quickly become the best-selling electric pickup in the US.
But the model lineup is getting old. Global competitors, including Chinese brands BYD, NIO, XPeng, and Zeekr, have massively upgraded their battery capacity and interior tech.
BYD just launched a car that it claims can
charge the battery in a third of the time a Tesla takes
.
Some American brands are closing the gap too.
Rivian’s newest EVs beat Tesla’s driving range by nearly 100 miles. Hyundai and Kia are offering lower starting prices than the Model Y.
Even legacy giant GM has leveled up its EV game with massive, well-powered EVs and value offerings like the $35,000 Chevy Equinox EV.
In its earnings report, Tesla
blamed shifting trade policies from President Trump and a shaky global supply chain for its struggles.
‘Uncertainty in the automotive and energy markets
continues to increase
as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,’ the company reported in its earnings.
The stock increases are largely attributed to the company’s forward-looking plans.
Tesla has been developing robots and autonomous vehicle technology that it believes will soon hit the road.
The company also said affordable vehicles, which have been teased for several years ‘remain on track for start of production in the first half of 2025.’
Tesla warned that the value cars will feature ‘less cost reduction’ than previously expected because of supply constraints.
Musk promised a $25,000 electric vehicle in September 2020. He has since called the plans ‘pointless’ and ‘silly.’
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