Tesla board secretly explored replacing CEO Elon Musk amid stock crash
Elon Musk – Tesla CEO, SpaceX founder and one of the world's most influential entrepreneurs (Photo: Getty Images)
Tesla's board considered replacing Elon Musk due to poor stock performance and his government commitments, but the board chair has since rejected the report.
Tesla's board of directors secretly reached out to executive recruitment firms in March to explore a potential replacement for Elon Musk as CEO, the Wall Street Journal reported, citing multiple unnamed sources.
The search was reportedly prompted by Tesla's dramatic stock slump — with TSLA falling as much as 45% in early 2025 — and Musk's extended absence while working for the White House's Department of Government Efficiency (DOGE).
Tesla's first-quarter results revealed a 71% plunge in profits, the worst in company history. That same day, Musk said he would step back from his near full-time government role and return focus to Tesla.
"My time allocation to DOGE will drop significantly," Musk told analysts on the earnings call. "Starting next month, I'll be allocating far more of my time to Tesla."
The Journal noted that it's unclear whether Musk was aware of the board's search or whether the effort is still active.
Directors had reportedly told Musk he needed to spend more time at the company — a request he didn't oppose, the report added.
Tesla chair calls replacement rumors "absolutely false"
Just hours after the story gained traction, Tesla Chair Robyn Denholm issued a strong denial.
"The media report on board members reaching out to recruitment firms to look for a new CEO to replace Elon Musk is absolutely false," Denholm said on Thursday.
She emphasized that the board has full faith in Musk, adding, "We are highly confident in Elon's ability to continue executing on the exciting growth plan ahead."
Wall Street analysts from Wedbush echoed that sentiment, calling Musk's renewed commitment to Tesla "the right thing."
In a research note, Dan Ives wrote, "We believe that cooler heads have now prevailed and that the Board is now NOT actively looking to replace Musk as CEO and this code red situation is now in the rearview."
Despite ongoing controversies — from showroom protests to declining China sales amid political tensions — Musk remains at the center of Tesla's leadership.
However, some reports suggest he has considered stepping down himself, frustrated by recent legal battles and growing political backlash.
Whether the board truly considered a change or not, Tesla's leadership remains under close scrutiny as the company navigates turbulent times.
Sources: The Wall Street Journal, CNN, Reuters
