Tesla has initiated a search for a new CEO, marking a pivotal moment for the electric vehicle giant as it grapples with a sharp downturn in profits, declining sales, and growing backlash over Elon Musk’s controversial involvement in politics.
The move follows weeks of investor unrest and a steep 71% drop in first-quarter profits, with earnings falling to $409 million, down from $1.4 billion a year earlier. Tesla shares have plunged nearly 40% since January, though some recovery followed the earnings announcement.
According to The Wall Street Journal, the company’s board began exploring CEO succession earlier this year as concerns mounted over Musk’s dual role as head of Tesla and his political appointment to lead the Department of Government Efficiency (DOGE) under President Trump. The search reportedly began without Musk’s prior knowledge.
At the urging of the board, Musk announced plans to step back from his political role starting in May and devote “far more of my time to Tesla.” Speaking during Tesla’s earnings call, Musk acknowledged the toll his foray into Washington has taken on the company’s brand and share price.
“Starting next month, my time allocation to DOGE will drop significantly,” he said, while admitting he still plans to contribute one or two days a week.
The pressure on Musk has intensified as Tesla’s once-loyal customer base — particularly environmentally conscious and tech-savvy consumers — has grown disillusioned with his alignment with far-right politics and outspoken support for Trump and other populist leaders.
Protests at Tesla dealerships have become increasingly visible. A grassroots campaign, Tesla Takedown, claimed a symbolic victory following the company’s poor financial results.
“Today’s earnings report sends a very clear message: the Tesla Takedown grassroots pressure is beginning to hit Tesla where it hurts — the company’s bottom line,” the group said.
While Tesla remains the top-selling EV brand in the US, analysts warn that its lead is shrinking as rivals roll out more competitive models. BYD, Rivian, Hyundai, and GM have all launched EVs that outperform Tesla in price, range, or charging speed.
In its earnings statement, Tesla blamed Trump’s aggressive trade policies and a volatile global supply chain for disrupting its cost structure. The president’s sweeping reciprocal tariffs, including a 145% levy on Chinese imports, have rattled the auto industry.
Despite the turmoil, Tesla is pressing ahead with plans for a new, more affordable electric vehicle set to launch in early 2025. It also highlighted continued development in robotics and autonomous driving tech as part of its long-term vision. However, it warned that the cost savings for its $25,000 EV, first promised in 2020, would be “less than previously expected.”
As Tesla begins its search for Musk’s potential successor, the company is also seeking to appoint an independent director to help stabilise governance amid mounting scrutiny.
Trump, who praised Musk this week for his work on DOGE, quipped that the CEO might want “to get back home to his cars.” Musk, in turn, credited the president for his support but admitted that the political spotlight had created headwinds for Tesla.
With the CEO’s attention now promised to return — and the brand’s once-golden reputation in flux — Tesla faces a defining crossroads. Investors and customers alike will be watching closely to see whether the company can regain focus and reassert its dominance in an increasingly crowded EV market.
