Tesla Dismisses Report of Board Plan to Replace Elon Musk

Tesla has strongly refuted claims that its board is actively searching for a new chief executive to replace Elon Musk, dismissing a report by The Wall Street Journal as false.

The report, published Wednesday, alleged that Tesla directors had contacted executive recruitment firms in March to begin exploring CEO replacement options, citing unnamed sources. However, Tesla Chair Robyn Denholm quickly rejected the claim via the company’s official X (formerly Twitter) account, saying, “The story is absolutely false. The board has full confidence in Elon’s ability to continue executing on our ambitious growth plans.”

The Journal’s report comes at a turbulent time for the electric vehicle maker. Tesla’s stock has experienced a sharp decline this year – falling by as much as 45% before partially rebounding. The company also posted a steep 71% drop in quarterly profits this April, marking its worst sales performance to date. The disappointing financial results were accompanied by Musk’s announcement that he would be stepping back from his full-time role in the White House’s Department of Government Efficiency (DOGE) to refocus on Tesla.

According to the Journal, the reported succession discussions were initiated as concerns mounted among board members over Musk’s divided attention. Directors reportedly urged Musk to spend more time at Tesla. Analysts, including Wedbush Securities’ Dan Ives, welcomed Musk’s decision to recommit, stating that the crisis point appeared to have passed and no active search for a new CEO was underway.

Musk’s dual roles have drawn scrutiny, particularly from investors concerned about his commitment to Tesla. Beyond Tesla, he continues to wield influence at X (formerly Twitter), SpaceX, and DOGE. His high-profile alignment with Donald Trump’s administration – alongside controversial public remarks and political affiliations – has fueled public backlash, including protests outside Tesla showrooms and reputational damage among environmentally conscious consumers.

The political entanglements have also placed Tesla in the crosshairs of U.S.-China trade tensions. Although Musk has publicly advocated for lower tariffs and clashed with Trump trade advisor Peter Navarro, Tesla’s business in China remains vulnerable. A recent easing of planned auto tariffs by the Trump administration is expected to benefit Tesla’s U.S. manufacturing operations by reducing costs on imported components.

During a Cabinet meeting on Wednesday, President Trump thanked Musk for his work with DOGE and acknowledged his decision to return to Tesla. In response, Musk – wearing two hats in a literal nod to his many roles – joked about the phrase “wearing many hats.”

Despite Denholm’s denial of any CEO search, speculation around Musk’s future at Tesla persists. Sources told the Journal that Musk has privately expressed a desire to eventually step down, although he has reservations about whether a successor could fully carry out his vision – particularly regarding Tesla’s pivot toward autonomous vehicle technology.

Further complicating Musk’s leadership trajectory is the legal status of his compensation package. A Delaware judge has twice struck down a stock options deal that would significantly increase his stake in the company. If reinstated, Musk could hold as much as 22.2% of Tesla’s shares, further solidifying his control.

During Tesla’s most recent investor call, Musk acknowledged the “blowback” from his government involvement and said he would scale back DOGE commitments to a few days a week beginning in May. CFO Vaibhav Taneja, meanwhile, conceded that the company’s sharp sales decline was partly due to negative public sentiment and incidents of vandalism linked to the brand’s political controversies.

While Musk insists his focus is shifting back to Tesla, questions remain over his long-term intentions and the company’s ability to weather ongoing leadership, reputational, and financial challenges.