Tesla made a brutal move to oust Elon Musk amid a cratering stock price and negative press from his controversial moves in the Trump administration.
The electric car company opened a search to find a new leader after Musk spent the past two decades as CEO, according to The Wall Street Journal.
The revelation came as Donald Trump praised Musk for his work with DOGE but said he may want ‘to get back home to his cars.’
However, 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.
Musk had been asked by the board to make the public statement promising he would head back to his day job or face losing it.
The CEO did not push back and announced he would be devoting ‘far more of my time to Tesla.’
The electric car maker sought the advice of multiple executive search firms to begin the process of succeeding Musk.
There is uncertainty regarding the progress made in the search to replace Elon Musk, as well as whether the search is still ongoing. However, according to anonymous sources, a specific firm had been chosen to handle the search.
It is also not clear if Elon Musk had any knowledge about the search for his replacement or about his role within the company. The company is actively seeking an independent director, regardless of Musk’s position as CEO.
The first-quarter profits of the automaker plunged by 71 percent, with the electric vehicle industry leader generating $409 million, a significant drop from the $1.4 billion reported during the same period the previous year.
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’
Wall Street expected a better performance — 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.
Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing “Cyber Rodeo” grand opening party in Austin
Trump (pictured right) thanked Musk for a work and said he’s welcome to stay for as long as he wants in a Cabinet meeting
‘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 Musk has catapulted himself into right wing politics, 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 and activists have responded with impassioned, sometimes fiery, protests at Tesla dealerships.
And, Tesla’s sales have tanked.
Elon Musk (pictured lower left) says he´ll dedicate more time to Tesla and his role as ‘First Buddy’ will ‘drop significantly’ starting in May after the company reported a breathtaking downfall in first quarter profits
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.
Tesla Takedown, an organization that advocates for free speech rights at the dealership protests, took victory for the revenue and sales downfalls
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.’
