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Rumors swirled that Tesla’s board was considering a replacement for Elon Musk. The company denies it, but if true, it signals not just boardroom drama—but a deeper reckoning with Tesla’s stagnation, Musk’s distractions, and a brutal loss of investor confidence.
Key Takeaways
- Wall Street Journal reported Tesla’s board explored CEO succession amid falling sales, product stagnation, and Musk’s political distractions.
- Chair Robin Denholm dismissed the report as "absolutely false," but insiders say she has shielded Musk from scrutiny in the past.
- Tesla's profit margins, sales volume, and innovation credibility are all in steep decline.
- The company’s increasingly erratic public messaging and delivery delays have rattled longtime supporters.
- Boardroom leaks suggest internal dissent and concern about Musk’s attention span—and whether Tesla can survive another 12 months at this pace.
- Shareholders are weighing whether brand value and innovation can survive Musk’s growing baggage.
The Spark: A Leak Too Convenient to Ignore
- The WSJ report landed in the middle of a critical earnings season, when Tesla reported a 71% drop in quarterly profits and stagnant global deliveries.
- Sources alleged that Tesla directors discussed whether Musk had the bandwidth or appetite to keep running the company.
- A board request that Musk publicly recommit to Tesla went partially ignored—he posted briefly, then pivoted to X-related topics.
- Denholm’s denial, issued hours after the story dropped, was unusually forceful—but insiders read it as performative damage control.
- Former Tesla executives say leaks like these don’t happen without intent: “This was a warning shot.”
- The leak also reignited debate about Tesla's internal culture—once seen as tight-knit and mission-driven, now characterized by instability and attrition.
The Tesla Board’s Breaking Point?
- Tesla’s board has historically tolerated Musk’s behavior—from tweeting about taking the company private, to SEC penalties, to online brawls with critics.
- Yet the company’s underlying fundamentals are deteriorating:
- Tesla stock is down 30% year-to-date.
- Gross margins have dropped from 25% in 2022 to 17.4% in 2024.
- Global EV competitors, especially BYD in China, are rapidly outpacing Tesla in production and pricing.
- Tesla’s once-premium branding is now diluted by aggressive discounting and mass-market expansion.
- The long-awaited Cybertruck is barely out of pilot phase, with just a few hundred delivered.
- Investor calls are increasingly combative, with some institutional players requesting governance reforms, including separating the CEO and Chair roles.
Who Leaked—and Why It Matters
- Analysts suggest multiple motivations behind the leak:
- Internal factions pushing for leadership accountability
- External stakeholders planting stories to sway stock perception
- Strategic testing of investor response to a potential leadership shift
- If the leak came from the board, it may indicate a serious fracture.
- If it came from operations, it suggests a workforce desperate for clearer leadership and direction.
- Either way, it represents a break in the longstanding Musk-first media policy—and signals that the story of Tesla is entering a new, less controlled chapter.
Who Would Replace Musk—And Who Would Dare?
- Replacing Musk isn’t just about finding a capable executive—it’s about rebranding Tesla without its central mythmaker.
- Candidates must be:
- Operationally world-class
- Politically insulated from Musk’s influence
- Willing to endure activist scrutiny
- Capable of aligning future tech with real delivery
- Some speculate about bringing in a tech-adjacent outsider—perhaps from Apple, Google, or Amazon—who can translate hardware, AI, and services into a coherent growth path.
- Others say a strategic COO (like Gwynne Shotwell at SpaceX) is more likely—keeping Musk atop the org chart but redistributing executive function.
- A full succession would demand massive board coordination, PR choreography, and legal clarity around Musk’s shareholding and influence.
If Musk Stays: Escalating Risks and Diminishing Returns
- Musk’s growing fixation on his social platform X and his AI startup xAI raises alarms.
- Tesla’s FSD (Full Self-Driving) updates remain years behind regulatory certification, with no clear monetization.
- Musk has used Tesla earnings calls to promote unrelated ventures—including Neuralink and Dogecoin.
- His engagement on X alienates key Tesla customer bases, especially women and liberal coastal buyers.
- Retail shareholders still rally around him—but institutions are growing impatient.
- If a COO is not appointed soon, Tesla risks operational decay, supply chain shocks, and declining workforce morale.
Tesla’s Slide—and the Bigger Musk Problem
- Tesla's cultural narrative—of mission, innovation, and clean tech—is under siege.
- Product design has stalled.
- Market leadership is challenged in every region.
- Brand affinity is deteriorating among first-gen owners.
- The larger Musk brand has become polarizing, casting a shadow over the company’s ESG rating, diversity efforts, and hiring.
- Musk’s ties to far-right influencers and disinformation networks threaten to turn Tesla from an innovation story into a political football.
- Every delay or distraction now looks like dereliction—and each scandal feeds the case for serious leadership change.
The Reckoning—Quiet or Loud
- Some shareholders are preparing proxy proposals to push for governance reform.
- Legal observers expect new lawsuits challenging Musk’s dual CEO roles at Tesla and X, as well as cross-usage of company resources.
- Tesla’s next board elections could turn into a referendum—not just on Musk, but on the board’s capacity to lead.
- At stake is not just leadership, but Tesla’s future as a viable tech innovator rather than a personality cult.
Tesla’s board may deny it, but the story has already changed. The questions are no longer hypothetical. Investors are skeptical. Executives are restless. And Elon Musk, for all his genius, may be accelerating a crisis Tesla can’t afford to face on autopilot.
