Amid rising concerns from investors over Elon Musk’s frequent absences, controversial political stances, and the company’s declining sales and profits, Tesla’s board has reaffirmed its support for the CEO. On Thursday, the board expressed confidence in Musk’s leadership, despite a recent report suggesting that the board had considered replacing him.
The article, published by the Wall Street Journal, was swiftly denied by Tesla board chair Robyn Denholm, who also faced criticism for her high salary and her perceived inability to hold Musk accountable to shareholders.
This latest controversy highlights the complex challenge Tesla’s board faces in managing a CEO who oversees multiple ventures, including SpaceX and Neuralink, while increasingly aligning himself with Republican politics—alienating some of Tesla’s more liberal customer base. However, the company’s stock and brand value remain closely tied to Musk’s image, making any move to replace him risky.
Many analysts estimate that Tesla’s market value—far surpassing its actual earnings—is largely driven by Musk’s promises of autonomous-driving technology and humanoid robots, innovations that have yet to materialize. Despite rising competition from companies like BYD in China, which are already producing affordable EVs, Tesla’s supporters view Musk as the key figure capable of delivering these futuristic technologies.
In her statement, Denholm addressed these concerns by reassuring investors that the board had “full confidence” in Musk’s ability to carry out Tesla’s ambitious growth plans.
However, Tesla’s core business of electric vehicles (EVs) continues to struggle, particularly in Europe, where Musk’s political affiliations have made the brand less appealing. Insiders have suggested that Musk could benefit from delegating day-to-day management to a senior executive, following the model of SpaceX, where Gwynne Shotwell serves as president and COO. Despite these suggestions, Musk has remained adamant about maintaining full control at Tesla.
Replacing Musk would be an extremely difficult task, said Brian Mulberry, a portfolio manager at Zacks Investment Management. The challenge would require someone who could fill Musk’s shoes and manage the financial complexities of the company while ensuring profitability and advancing long-term projects like the robotaxi network.
Gene Munster, managing partner at Deepwater Asset Management, went as far as to say that replacing Musk is essentially impossible, as his persona is intertwined with Tesla’s identity.
Musk and Tesla’s board did not respond to requests for comment, though Musk made light of his critics during a White House Cabinet meeting, joking about wearing multiple hats as he joked with President Trump.
Tesla has seen several senior executives depart over the past year, particularly those who disagreed with Musk’s shift in focus from EVs to more speculative technologies like robotaxis and AI. Some executives raised their concerns with the board, but the majority of them sided with Musk.
Investors like Gary Black and James McRitchie have expressed doubts that Tesla has an internal candidate capable of replacing Musk, given his extensive technical, strategic, and execution skills. McRitchie pointed out that much of Tesla’s share price is tied to Musk’s personal brand, comparing him to former GE CEO Jack Welch—who was once seen as infallible but whose departure led to significant challenges for the company.
Despite the ongoing controversies, Mulberry believes that Tesla could succeed without Musk, emphasizing that the company’s existing range of EVs, combined with its advancements in autonomous driving, may be sufficient to sustain the business. The key to Tesla’s future, he argues, lies more in execution than in further innovation.
