Should Elon Musk stay or should he go? Many have lately asked this question for Tesla, as the car company suffers a massive sales and revenue drop due to the CEO’s political endeavors. According to American media, the board has actively been scouting for a replacement.
A month after reporting a staggering 71 percent drop in first-quarter profit, the company’s board reportedly took the first steps toward finding a replacement CEO. As The Wall Street Journal reports, board members contacted headhunter firms about a potential new chief executive. The need becomes tangible as Tesla faces slowing sales, rising internal frustration, and criticism over Musk’s role as a Trump whisperer.
A means of pressure?
Musk, who has led Tesla since 2008, currently heads DOGE—the Department of Government Efficiency. However, his proximity to the White House has backfired on investors and board members alike, who uttered concerns that his political commitments are diluting his focus on Tesla. Though no official reason was given, the last quintessential employee leaving was David Lau, responsible for Tesla’s successful software strategy for more than a decade.
A conversation that took place just weeks before Tesla’s quarterly earnings call, which unveiled a dramatic sales drop, led to the findings from The Wall Street Journal. Reportedly, board members pressed Musk to focus more time on the company. Not without impact. Musk promised that, starting this month, he would “spend significantly more time at Tesla.” In response, stocks rose again, underlining the significance of the tie-up between the Musk name and his coveted car brand.
But apparently, the board was ready to take further steps if Musk planned to prioritize his political activities. Both Tesla Chair Robyn Denholm and Musk deny the report of an active CEO search, calling it “absolutely false” and “deliberately misleading.” Still, the speculation has only intensified as financial performance remains poor.
Downward spiral
Sales keep tumbling across Europe, particularly in markets where Tesla once enjoyed strong momentum. In Belgium, registrations of new Tesla vehicles dropped by 57 percent in the first four months of 2025 compared to the same period last year, according to the auto federation Febiac. In April alone, just 570 Tesla vehicles were registered, more than 50 percent fewer than a year prior. Dutch figures show a similar trend: sales fell nearly 75 percent year-over-year in April, with only 382 vehicles sold compared to 1,457 in April 2024. Tesla has a problem.
Though Tesla faces increasing competition from newer, cheaper EVs, particularly Chinese automakers, the controversy surrounding Musk distracts the public from his brand. Indeed, the recently revised Model Y, titled the world’s best-selling car, doesn’t seem to counter the negative spiral.
Musk’s own town
Musk’s expanding personal ventures further complicate the situation. Earlier this year, he successfully established “Starbase,” a privately controlled municipality in Texas built around SpaceX’s launch facilities in Boca Chica. The move drew both admiration and criticism, as environmental groups raised alarms about the impact on nearby protected areas.
All of this has rattled investors. Tesla’s market value has halved since January, while Musk is believed to have lost one billion dollars per day since Trump got elected. In any case, the board’s reported search for a successor, denied or not, reflects genuine concern about the CEO’s divided focus.
Finding a suitable replacement would be far from an easy headhunting, as Musk’s personality is strongly interwoven with the brand. But even if he returns with complete focus at the helm of Tesla, his far-right ideas might have smudged the image of Tesla to an extent that has become irreparable, at least in the short term. Extremism makes for bad marketing.
