Tesla Board Launches CEO Search as Musk Faces Pressure to Focus Amid Stock Plunge

Unknown Apr 02, 2026 1,450 Views

Tesla’s board has initiated a formal search for a new CEO to succeed Elon Musk, according to sources familiar with the matter, as the company grapples with plummeting profits, a 45% stock decline in 2025, and growing investor frustration over Musk’s divided attention. The move signals...

Key Highlights

CEO Search Underway:

Tesla’s board has contacted multiple executive search firms to identify potential candidates, marking the most serious effort yet to prepare for a post-Musk era. The process aims to ensure stability as Musk juggles government advisory roles and other ventures.

Stock and Profit Crisis:

Tesla shares have fallen 45% in 2025, hitting multi-year lows, while Q1 revenue dropped 21% YoY-its steepest decline in 13 years. Operating income missed Wall Street estimates by 65%, driven by weak demand and Musk’s polarizing political stances.

Musk’s Divided Focus:

Musk’s role in the Trump administration’s Department of Government Efficiency has drawn criticism, with investors like Ross Gerber demanding he step down or refocus entirely on Tesla. “Sales are plummeting because the CEO is so divisive,” Gerber stated.

Succession Candidates Emerge:

Tom Zhu, Tesla’s global operations chief, is viewed as a top internal contender due to his hands-on management of production and supply chains. Board members have privately discussed appointing an “administrative CEO” to handle day-to-day operations while Musk focuses on product development.

Governance Pressures:

Shareholders are pushing for a clearer succession plan, with proposals urging the board to disclose a “key-person risk report” to mitigate reliance on Musk. The board faces scrutiny for its perceived inaction during Tesla’s recent struggles.

Musk’s Defense:

During Tesla’s Q1 earnings call, Musk pledged to spend “a day or two” more weekly at Tesla but defended his political engagements, blaming “wasteful largesse” recipients for backlash. He emphasized Tesla’s focus on AI and robotics as future growth drivers.

The Road Ahead

The CEO search comes as Tesla navigates a trade war, shrinking margins, and brand damage linked to Musk’s controversies. While the board has not set a timeline, the move reflects urgency to reassure investors and stabilize operations. Meanwhile, Zhu’s rise underscores Tesla’s need for operational expertise to counter slowing EV demand and ramp up next-gen projects like robotaxis.

“Elon should either return full-time or pass the baton. Tesla can’t afford a part-time CEO,” said Ross Gerber, highlighting investor impatience.

Source: The Wall Street Journal, Hindustan Times, Tesla Q1 Earnings Call, Reuters, People Matters

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