Key Takeaways
- Tesla’s board is searching for Elon Musk’s successor amid declining sales.
- The search is driven by external consultancy and Musk’s reduced focus on day-to-day operations.
Tesla’s board of directors quietly initiated a search for CEO Elon Musk’s successor amid declining sales and profits, reaching out to several executive search firms about a month ago, the Wall Street Journal reported Wednesday, citing people familiar with the talks.
The company has also been seeking to add an independent director to its eight-member board and has been meeting with major investors to shore up confidence, according to the report.
The search was said to have been launched amid growing concerns about Musk’s time away from Tesla.
The tech mogul dedicated a great deal of hours to working in Washington as head of the Department of Government Efficiency (DOGE) under President Donald Trump. During that period, Tesla’s first-quarter profit plunged 71%, and sales fell in key markets including China, Germany, and California.
According to the report, the board recently met with Musk and urged him to re-engage with company operations, a request he didn’t resist.
“Starting next month, I’ll be allocating far more of my time to Tesla,” Musk said during a recent earnings call.
It’s unclear whether Musk was aware of the succession planning discussions or whether his pledge to refocus on Tesla has affected the board’s efforts, the report stated.
Tesla shares have declined sharply in recent months, following a peak valuation of $1.5 trillion in late 2024. The stock closed Wednesday down around 3%, per Yahoo Finance data.
The company’s Cybertruck has underperformed expectations, and its pivot to AI and robotics, including the upcoming launch of a robotaxi service, has yet to offset weakening EV demand.
Musk, who remains a board member and owns roughly 13% of the company, has privately expressed frustration over working without pay since a Delaware judge voided his compensation package last year. The board has since formed a committee to revisit CEO compensation.
Last spring, Musk expressed to a confidant that he no longer wanted to be Tesla’s CEO but worried about finding a suitable replacement who could sell Tesla’s vision beyond automotive manufacturing.
“We’re not on the ragged edge of death, not even close,” Musk told investors after announcing his intention to reduce his time in Washington.
Tesla reported retaining its 11,509 Bitcoin in Q1 2025 despite its financial performance falling short of expectations. Tesla’s Bitcoin stash saw a recovery in value, surpassing $1 billion as Bitcoin prices rose.
