According to the Wall Street Journal, Tesla's board is in the process of searching for a successor to Elon Musk's management position.
The Neglect of Elon Musk
About a month ago, Tesla's stock plummeted, and many investors began to worry about Elon Musk spending too much time in Washington instead of running the company. As a result, the Tesla board has started to seriously consider finding a successor for this CEO.
Amidst Tesla facing a significant decline in revenue and profits, Musk is spending a lot of time assisting President Trump in efforts to cut federal spending, serving as a 'special employee' in the government.
Musk's absence at Tesla leaves many employees feeling confused. Some say the last time they saw him engage in months was through a company-wide meeting broadcast live on platform X in March. Despite trying to reassure with promises of a bright future, Musk's statements are not enough to ease internal concerns and worries from investors.
Musk's close alliance with President Trump has somewhat harmed Tesla's image in the eyes of many customers, especially in key markets like California and Germany.
When Tesla is no longer the pioneer
As Musk spends time on politics, his largest company is gradually losing growth momentum. In 2024, Tesla's electric vehicle sales are set to decline for the first time after more than a decade of continuous growth. The company is forced to cut prices to stimulate demand, affecting profit margins.
The highly anticipated Cybertruck has become a laughing stock in the media due to its bizarre design and a series of technical flaws. Tesla sold only about 39,000 Cybertrucks in the first year, far from the target of 250,000 vehicles per year.
Meanwhile, competitors like BYD in China are gradually dominating the market. In the U.S., models from Ford, GM, and European manufacturers are becoming increasingly competitive. President Trump's increase in import taxes from China and North America adds further difficulty to Tesla's supply chain.
Tesla continues to focus on the future with self-driving car and robot projects. Musk has high hopes for the 'Cybercab' – a vehicle without a steering wheel or pedals, and the humanoid robot 'Optimus', seen as the next pillar of Tesla. The billionaire has claimed that robots could turn Tesla into a $30 trillion company – many times its current value.
However, currently, the numbers do not lie: Revenues in the most recent quarter fell by 9%, with the automotive sector dropping by as much as 20% due to weak sales in key markets. Although Musk asserts that 'Tesla is not on the verge of 'breathing its last'', investors still have reasons to be concerned.
The Journey to Find a Successor: Not Easy to Replace an Icon
According to the Wall Street Journal, Tesla's board has begun reaching out to recruitment firms to implement the plan to succeed Musk. Finding someone who can replace an icon like Elon Musk – who has been with the company for nearly 20 years and is the soul of the brand – is an extremely challenging task. Musk is not just the CEO; he is also the 'vision seller' that Tesla is not merely a car company, but the future of technology and automation.
However, Musk has also admitted in private messages that he feels exhausted and wants to leave the CEO position, especially after a Delaware court rejected his billion-dollar salary package. He complained that he has been working without pay for the past seven years and feels he is no longer recognized as deserving. The board has now established a special committee to review the CEO's compensation issues.
Some Tesla executives, like co-founder JB Straubel, have met with investors to reassure them that the company is still under control. The Tesla board is also looking for a new independent member to strengthen internal oversight.
Although Musk has committed to 'spending more time on Tesla starting next month', the question is whether this will be enough to ease market worries and reverse the current decline. Musk has yet to provide an official response regarding the search for a successor, and it remains unclear whether this new commitment will affect the search process.
Reference WSJ
