Tesla’s board is reportedly exploring a leadership transition as early as March, amid growing concerns over CEO Elon Musk’s increasing focus on politics and declining company performance. According to The Wall Street Journal, board members are alarmed by Musk’s heightened role within the Trump administration’s Department of Government Efficiency (DOGE), which has drawn investor criticism and led to discussions about succession planning.
The move comes as Tesla’s stock struggles, having dropped up to 45% this year before a mild rebound. Investors have voiced frustration over Musk’s shifting priorities, especially after his involvement in controversial federal job-cutting initiatives, as reported by Reuters. Musk has since stated he will reduce his Washington engagements and redirect attention to his businesses.
However, damage may already be done. Tesla’s electric vehicle lineup has seen little innovation, with sales continuing to decline. Musk’s vocal support for far-right politics in Europe has sparked backlash, including protests and vandalism targeting Tesla infrastructure in the US and EU.
Last week, Tesla reported a 71% drop in first-quarter earnings, deepening board concerns. Musk announced his return to company matters shortly after the earnings call, amid speculation that the board urged him to publicly recommit to Tesla. It is unclear whether Musk, who is also a board member, was aware of the succession talks.
While no immediate CEO change has been confirmed, the internal deliberations signal Tesla’s readiness to shift leadership amid falling profits, political distractions, and investor unrest.