Tesla Chair Robyn Denholm has pushed back strongly against a Wall Street Journal report claiming that the company’s board initiated a search for a new CEO to potentially replace Elon Musk. The Journal’s story, published Wednesday, alleged that Tesla’s board contacted executive search firms as early as March to begin identifying potential successors. It cited anonymous sources familiar with internal board discussions.
In a post shared via Tesla’s official account on X, Denholm categorically denied the report, saying it was “absolutely false.” She emphasized the board’s unwavering support for Musk, stating that directors remain “highly confident in his ability to continue executing on the exciting growth plan ahead.”
Fallout from a Tumultuous Few Months
The controversial Journal article came amid what has been a turbulent period for Tesla. The electric vehicle giant has struggled with falling stock prices, declining sales, and public criticism of Musk’s extended absence due to his work with the U.S. government.
For most of this year, Musk served in a high-profile role as head of the White House’s Department of Government Efficiency (DOGE), an appointment that led to growing concern among shareholders and analysts over his split focus. Tesla’s stock had fallen by as much as 45% before a modest rebound in line with broader market recovery trends.
April brought fresh challenges as Tesla reported its sharpest drop in both revenue and net income in recent history. The company’s first-quarter earnings sank by a staggering 71%, a downturn that Musk attempted to soften by announcing his decision to scale back his government duties and reengage with Tesla.
The Journal’s report questioned whether this return to the company had affected the board’s supposed succession planning. According to the paper, directors told Musk earlier this year that he needed to devote more time to Tesla. The report added that Musk did not resist this directive.
In response, Musk condemned the Journal’s story on X, calling it “an EXTREMELY BAD BREACH OF ETHICS.” He criticized the publication for not including a denial from Tesla’s board in the original piece and accused it of deliberate misinformation.
The Wall Street Journal stood by its reporting, stating that Tesla had been given a chance to comment before the article went to press and chose not to provide a statement at the time.
Analysts and the Market React
Industry watchers quickly weighed in. Dan Ives, managing director at Wedbush Securities and a longtime Tesla analyst, published a research note saying Musk had taken the right step by recommitting to Tesla. Ives and his team predicted Musk would remain CEO for “at least five years,” describing the prior leadership uncertainty as a “code red situation” that now seems to have passed.
Denholm’s public denial came after Ives’ note was released but appeared to further stabilize the company’s standing with investors. However, confidence remains fragile.
President Donald Trump also waded into the conversation during a Wednesday Cabinet meeting, personally thanking Musk for his work in the federal government. “You have been treated unfairly, but the vast majority of people in this country really respect and appreciate you,” Trump said, indicating that Musk would remain involved with White House projects on a part-time basis.
In characteristic fashion, Musk responded with humor, referencing his many roles by saying, “Well, Mr. President, you know they say I wear a lot of hats,” while reportedly wearing two hats stacked on top of each other during the meeting.
Public Controversies and Internal Struggles
Despite this apparent reconciliation between Musk and the Tesla board, the company continues to battle serious reputational and operational challenges.
In recent months, Tesla showrooms across the U.S. and Europe have become the focus of frequent protests. Once a darling of climate activists and sustainability advocates, the brand has suffered reputational damage, particularly among liberal and environmentally conscious consumers. This decline in sentiment is partly attributed to Musk’s alignment with far-right ideologies and controversial online activity.
Even before his appointment to the Trump administration, investors raised concerns about Musk’s diminishing presence at Tesla. His 2022 acquisition of Twitter, now rebranded as X, absorbed much of his energy, leading to questions about his bandwidth and commitment. Musk’s tenure at X has also drawn criticism for promoting extremist views, amplifying conspiracy theories, and providing a platform to fringe figures.
Meanwhile, Tesla has found itself at the center of the U.S.-China trade conflict. Although Musk has advocated publicly for reduced tariffs, he has made limited progress in swaying White House policy. Tesla’s vehicle sales in China have dropped, hurt by tensions with Beijing and rising anti-American sentiment.
On the domestic front, however, Tesla could benefit from Trump’s recent easing of auto tariffs. The company assembles most of its vehicles in the U.S. but imports many parts. The White House had planned to impose a 25% tariff on imported car parts starting this weekend, but an executive order issued days ago delayed that move, offering temporary relief to automakers like Tesla.
Tesla’s Worst Quarterly Report Ever
During Tesla’s most recent earnings call, Musk acknowledged the fallout from his time with DOGE. “There’s been some blowback for the time that I’ve been spending in government,” he admitted. He pledged to drastically reduce his involvement in federal initiatives starting in May, devoting “far more” of his attention to Tesla.
Chief Financial Officer Vaibhav Taneja, on the same call, also acknowledged that the protests and public backlash hurt the company’s sales. “The negative impact of vandalism and unwarranted hostility towards our brand and our people had an impact in certain markets,” Taneja said.
Musk’s Motivation and Lingering Doubts
Despite the company’s assurance that Musk will remain CEO, questions about his long-term commitment persist. According to the Wall Street Journal, Musk recently confided to a close associate that he no longer wants to lead Tesla. While he remains deeply attached to the company’s mission—particularly its ambition to lead the autonomous vehicle revolution—he reportedly feels burned out and unsure about who could carry forward his vision.
Fueling the speculation about Musk’s potential exit is the ongoing legal battle over his massive compensation package. Musk owns roughly 12.8% of Tesla through 410 million shares, and he has been granted options for another 304 million shares as part of a 2018 pay agreement. That package, the largest in corporate history, has been voided twice by a Delaware judge, placing it in legal limbo.
If restored, those options would boost his ownership stake to over 22%, solidifying his influence regardless of his executive title.
Testimony from Tesla board members during the Delaware case revealed their belief that awarding Musk such an outsized compensation package was necessary to keep him focused on the company. As of now, Musk continues to juggle leadership roles at Tesla, SpaceX, and X, each with its own set of complexities and pressures.
Looking Ahead
Despite Denholm’s forceful rejection of the CEO search narrative, Tesla remains in a precarious position. The company must navigate trade tensions, restore its public image, and regain investor confidence—all while keeping its mercurial leader focused and engaged.
Whether Musk’s return to Tesla leadership marks a true turning point or merely delays inevitable succession planning remains an open question. For now, both the board and Musk appear aligned, but market watchers will be closely monitoring the next few months for signs of deeper strategic shifts.
