Potential Scenario: Elon Musk's position as CEO of Tesla in jeopardy?
Title: Is Tesla Looking to Ditch Elon Musk as CEO? A Closer Look at the Electric Car Giant's Boardroom Drama
© Aaron Schwartz/CNP/Bloomberg via Getty Images By Simon Chodorge Editor-in-Chief (automotive & industry) Published on
Tesla's mouth remains zipped when it comes to media rumors, but the American automotive powerhouse couldn't stay quiet when faced with such eyebrow-raising news. Indeed, on May 1, the infamous Wall Street Journal sent shockwaves through the financial world by hinting at a potential succession plan at the electric vehicle titan, with Elon Musk at the helm for nearly 17 years. According to the Wall Street Journal, Tesla's board is allegedly in talks with headhunting firms to find a new CEO. However, board chair Robyn Denholm promptly dismissed these allegations. For good measure, the paper stood by its information.
It's tough to know who's telling the truth. In any case, some investors find the scenario plausible, even desirable, considering Tesla's lackluster performance. After experiencing a meteoric rise, the car industry darling has seen its delivery figures drop (-1%) in 2024. The decline was even steeper in the first quarter of 2025, with deliveries plummeting 13% year-on-year. Tesla's stock has taken a beating, shedding a quarter of its value since the beginning of the year. And what about Elon Musk amidst all this? He's got his mind on other things, as he's joined forces with President Donald Trump in the "ministry of government efficiency." This distraction has reportedly fueled tensions within the board, according to the Wall Street Journal.
Elon Musk or the Directors: Who Calls the Shots at Tesla?
From a legal perspective, could Elon Musk be ousted as CEO? "Yes, the board can dismiss the CEO. A simple majority vote is enough," explains Ann Lipton, a corporate governance expert at Tulane University (USA). The appointment of the CEO also falls under the domain of the board. And in this context, Tesla's bylaws support the nominating committee's authority to hire headhunting firms.
Better hide your Tesla tomorrow... That's the theory. In practice, it's harder to imagine a betrayal by the board. The American legal system has already probed Tesla's inner workings, dismissing Elon Musk's extravagant $50 billion compensation plan. In a 200-page document, the Delaware court highlighted concerns about the board's independence, questioning the impartiality of its eight members. Among them? Kimbal Musk, Elon's brother. James Murdoch, son of media mogul Rupert Murdoch, and an old friend of the CEO. Ira Ehrenpreis, a long-time business partner of the Musk brothers. Robyn Denholm, whose wealth is largely tied to her seat at Tesla. With such a composition, the board seems more inclined to support Elon Musk.
When Elon Musk Talked About Stepping Down from Tesla
There's still one possibility: a voluntary abdication by Elon Musk, in agreement with the board. "Whatever happens, it will be Elon's will," commented Ross Gerber, a long-time Tesla investor, on Bloomberg. According to him, Elon Musk is now more focused on xAI, his artificial intelligence company, than cars. "Elon's goal is to keep pace in the race for artificial intelligence. And if he doesn't concentrate on AI now, he'll fall behind some tough competitors," such as Facebook, Google, Microsoft, and OpenAI. Not an entirely unexpected prediction. In early 2024, Elon Musk had warned investors: without holding 25% of the voting rights of the car company, "I would prefer to build products outside of Tesla."
Tesla: Get Ready for the Invasion of Humanoid Robots, Courtesy of Elon Musk Elon Musk has been seen as an untouchable boss, often embodying the brand. Unlike his competitors, who spend heavily on advertising, Tesla still relies on "keynotes" where Elon Musk puts on a show. However, this adoration is dwindling due to Musk's increasingly conservative stances, leading some consumers to boycott his products (including Starlink). Tesla's stock dip has also shaken the confidence of some investors, including those who have long believed in its rise. Notably, the date of Tesla's annual general meeting for 2025 has yet to be set. Given the past year's challenging results, it's understandable.
By the Way* Elon Musk* Tesla* Automotive Industry
- Despite the rumors, Tesla's board dismissed the allegations of seeking a new CEO, indicating a strong likelihood of Elon Musk continuing his leadership role.
- In case of Elon Musk's voluntary abdication, the decision would be in agreement with the board, as per Ross Gerber's comment on Bloomberg.
- According to Ann Lipton, a corporate governance expert, Tesla's board has the authority to dismiss or appoint a CEO, though their allegiance to Elon Musk seems evident given their intertwined interests.
- The decline in Tesla's delivery figures and stock value has triggered discussions about governance, with some investors viewing a potential succession plan as a step towards better financial performance.
- In the realm of Tesla's business and technology, entertainment is also starting to play a part, as some consumers are boycotting Elon Musk's products due to his growing conservative stances in the media.
