Tesla’s chair Robyn Denholm has denied a Wall Street Journal report claiming that the company’s board has started searching for a new CEO to replace Elon Musk.
According to the Journal’s report on Wednesday, Tesla’s board engaged executive placement agencies in March to find Musk’s successor, citing several unnamed sources.
Denholm refuted these claims in a post on Tesla’s official X account, describing them as “absolutely false” and emphasizing the board’s “high confidence” in Musk’s ability to continue executing Tesla’s ambitious growth strategy.
The surprising report underscored recent instability at Tesla, particularly as Musk has dedicated substantial time to initiatives with the White House’s Department of Government Efficiency (DOGE).
Tesla’s share price had dropped by as much as 45% this year, although it partially recovered during a broader market upturn.
In April, the company revealed a steep decline in first-quarter sales and profit, with earnings plunging 71%—news overshadowed by Musk’s simultaneous announcement that he would step back from his government role and return full-time to Tesla.
The Journal noted uncertainty regarding whether Musk’s announced return affected the board’s succession planning. Around the same period, directors reportedly told Musk he needed to devote more time to Tesla, and Musk did not object, according to the report.
Analysts led by Dan Ives, global head of technology research at Wedbush Securities, praised Musk’s decision to recommit as Tesla CEO and expressed their belief that he would remain in the role for “at least five years.”
“This situation with Musk at DOGE was reaching a breaking point, but we believe that cooler heads have now prevailed, the Board is now NOT actively looking to replace Musk as CEO, and this code-red situation is now in the rearview,” they wrote in a research note published Wednesday before Denholm’s statement.
During a Cabinet meeting on Wednesday, President Donald Trump thanked Musk for his government service, which is officially concluding soon, although Musk will continue to serve in advisory roles with the White House.
“You have been treated unfairly, but the vast majority of people in this country really respect and appreciate you, and everyone in this room can strongly affirm that,” Trump told Musk. “You’ve truly been a tremendous help.”
“You’re invited to stay as long as you want,” Trump added. “At some point, I assume, you’ll want to return home to your cars.”
Musk, humorously wearing two hats at once, joked in reply, “Well, Mr. President, you know they say I wear a lot of hats.”
Trump administration officials and Cabinet members have frequently clashed, with Treasury Secretary Scott Bessent notably engaging in a shouting match with Musk earlier this month.
Yet Musk has arguably faced greater challenges at Tesla, where protests outside showrooms have become routine. Once celebrated by environmental advocates, Tesla now suffers substantial—and potentially irreparable—damage to its reputation among former supporters.
Even before accepting a role in the White House, Musk faced criticism from investors who argued he wasn’t dedicating sufficient attention to Tesla, his only publicly traded company.
In 2022, Musk acquired Twitter, now known as X, dedicating considerable effort in recent years to radically reshaping the company’s operations.
Although Musk is no longer CEO of X, he remains actively involved and has faced criticism for promoting conspiracy theories, making offensive statements, and amplifying far-right and neo-Nazi figures.
Musk also leads SpaceX, a major government contractor likely benefiting from his White House connections.
Tesla has, however, become embroiled in Trump’s damaging trade conflict with China. Despite Musk’s public advocacy for lower tariffs and his public disagreements with Trump’s senior trade adviser Peter Navarro, Musk appears to have made little progress, placing Tesla’s China sales at risk.
Nonetheless, Trump’s recent softening of proposed auto tariffs will likely benefit Tesla domestically, as the company manufactures most of its vehicles in the U.S. but imports numerous components.
These imported parts were set to incur a 25% tariff starting this weekend, but Trump’s latest executive actions temporarily reduce that burden for American manufacturers, including Tesla.
Tesla’s Disastrous Quarter
On last week’s call with Tesla investors and analysts, Musk acknowledged, “There’s been some backlash over the amount of time I’ve spent with the Department of Government Efficiency.”
He announced plans to significantly reduce his involvement with DOGE beginning in May, dedicating only one or two days per week to its activities.
“My time commitment to DOGE will greatly diminish,” Musk stated. “Starting next month, I’ll be focusing substantially more on Tesla.”
He suggested he could scale back his involvement since “the primary task of establishing DOGE is complete.” However, evidence indicates many potential Tesla customers have turned away due to Musk’s vocal support for the Trump administration and far-right political parties in Europe.
Tesla recently reported the largest sales drop in its history, significantly contributing to a steep decline in quarterly profits.
While Musk downplayed the impact of protests on Tesla’s performance, Tesla CFO Vaibhav Taneja openly acknowledged the negative effects during the investor call.
“There has been a lot of speculation regarding the reasons behind the decline in our vehicle deliveries in the first quarter,” he said. “The negative impact of vandalism and unwarranted hostility towards our brand and our people has affected certain markets.”
