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Elon Musk was long considered a critical asset for Tesla, so much so that his leadership continually accrued a sizable valuation premium for the high-momentum stock. Now, however, it seems Musk has become a liability for Tesla, if the Wall Street Journal’s latest report is anything to go by.
To wit, WSJ is now reporting that Tesla’s board actively started searching for a CEO candidate earlier this year to replace Elon Musk, going so far as to reach out to several firms that specialize in executive placements.
The board had apparently also laid down the proverbial gauntlet, demanding that Musk prioritize his role at Tesla over his DOGE-related activities. By all accounts, Elon Musk appears to have complied by publicly declaring during the recent Q1 earnings call that his DOGE work was “mostly done,” and that he would spend a lot more time at Tesla from May onwards.
According to the Wall Street Journal, it is unclear if Elon Musk’s earnings call declaration was sufficient to assuage the Tesla board’s concerns.
For the benefit of those who might not be aware, Elon Musk’s overt political role at the Department Of Government Efficiency (DOGE) has spawned a material backlash and introduced partisanship into Tesla’s sales calculus in the US.
Moreover, Elon Musk also alienated a large segment of the German population by vigorously supporting the far-right AfD party in recent elections.
Nonetheless, at the recent earnings call, the EV giant’s CFO attempted to underplay the supposed brand damage to Tesla from Elon Musk’s political activities, asserting that the “unwarranted hostility” only had an impact in certain markets. Elon Musk then further clarified that “absent from macro issues, we don’t see any reduction in demand.”
TESLA’S HEAD OF BATTERY ARCHITECTURE VINEET MEHTA DEPARTS – THE INFORMATION
— First Squawk (@FirstSquawk) April 30, 2025
Meanwhile, today’s report from the WSJ came just hours after the departure of Vineet Mehta, the head of battery architecture at Tesla.
This back-to-back adverse reporting is currently taking a toll on Tesla’s share price, with the stock declining over 3 percent on Robinhood’s overnight trading platform.
