Tesla board starts process to remove Elon Musk as CEO of the company

The Tesla board has started the process of replacing Elon Musk as chief executive, after a month of internal pressure and public backlash over his continued absence from the company.

This happened as sales fell, profit collapsed, and investors lost patience with Elon’s obsession with the White House. Board members contacted many top recruiting firms to begin the official search for a new CEO, according to The Wall Street Journal.

Meetings were held behind the scenes. At one of them, directors told Elon he had to spend more time at Tesla, and that he should say so publicly. Elon didn’t argue. The company had just posted a 71% plunge in first-quarter profit.

Elon told shareholders on the earnings call, “Starting next month, I’ll be allocating far more of my time to Tesla.” Days later, President Donald Trump thanked Elon during a cabinet meeting. “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.”

Elon’s absence triggered leadership crisis inside Tesla

No one knows if Elon was aware of the CEO search or whether his promise to return to Tesla made a difference. But some board members already picked a search firm. Elon didn’t respond to questions. The company hasn’t shared anything publicly.

If a new CEO is named, it would be the end of Elon’s two-decade reign running the electric car maker. He gave up the chairman seat in 2018 but stayed in charge of everything else.

The eight-person board also wants to add a new independent director. JB Straubel, the company’s co-founder, has been meeting big investors to convince them that Tesla isn’t collapsing. But Elon’s political shift came at the worst time.

In 2024, Tesla’s car sales dropped for the first time in more than ten years. Price cuts destroyed profit margins. The Cybertruck rollout was a disaster. It became a joke on late-night shows for its design.

After Trump won re-election, Tesla’s value shot up to $1.5 trillion. Then it crashed to $900 billion