Tesla’s board of directors has reportedly begun preparations to select a successor for CEO Elon Musk. The Wall Street Journal (WSJ) reported on Wednesday that the board has been in contact with executive recruitment firms for about a month. However, the specific progress of the succession process remains unconfirmed.
Tesla faces declining sales and profits, raising concerns among investors about the sustainability of Musk’s leadership. Recently, Musk’s involvement in the Department of Government Efficiency (DOGE) during the Trump administration has drawn criticism for excessive external activities.
Musk stated that he would reduce time spent on government-related activities and dedicate more time to his companies. However, it remains unclear how this decision impacts the board’s review of a successor, and it is uncertain whether Musk was aware of the review. Neither Tesla nor Musk has issued official statements regarding the WSJ report.
The board’s review of a successor signals that Tesla is seriously considering a future beyond Musk for the first time. Since late 2024, Tesla has faced stagnation in the global EV market due to declining sales, reduced profitability from price cuts, and intensified competition. Investors are increasingly concerned about the negative impact of Musk’s political and social activities on the company’s management.
Following the first-quarter results, Musk emphasized future visions focused on robotaxis, AI, and humanoid robots, prioritizing long-term technology over short-term performance. However, Tesla faces management challenges like product line enhancement and supply chain restructuring, and Musk’s potential long-term absence raises uncertainties.
The review of a successor does not indicate an immediate CEO change but suggests Tesla takes steps to mitigate the Musk risk and ensure long-term stability. Tech-centric companies like Apple and Nvidia benefit from clear succession plans, contributing to stock stability, indicating Tesla may seek structural adjustments to restore investor confidence.
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