Tesla Inc (TSLA) Stock: Board Chair Rejects CEO Replacement Reports As Sales Decline

TLDR

Tesla’s board chair Robyn Denholm denied reports that the company was seeking to replace Elon Musk as CEO Tesla’s Q1 2025 deliveries dropped 13% year-over-year, marking its worst quarterly decline ever Musk recently pledged to reduce his time with the Trump administration to focus more on Tesla Some analysts value Tesla’s car business at $100/share and energy storage at another $100/share, with the remainder as a “Musk premium” Tesla’s stock has been affected by Musk’s political activities, with protests and vandalism at showrooms and charging stations

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Tesla’s board chair Robyn Denholm has firmly rejected a Wall Street Journal report claiming the company was quietly searching for a successor to CEO Elon Musk. The denial came swiftly after the publication suggested board members had contacted executive search firms about a potential replacement.

Tesla, Inc. (TSLA)

“Absolutely false,” Denholm stated on social media platform X. She added that the board remains “highly confident” in Musk’s leadership and his ability to execute Tesla’s growth strategy.

Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company.

This is absolutely false (and this was communicated to the media before the report was published).

The CEO of Tesla is…

— Tesla (@Tesla) May 1, 2025

Musk himself called the report “deliberately false” on X.

The controversy erupted as Tesla faces mounting challenges. The electric vehicle maker delivered just 337,000 cars in the first quarter of 2025, missing estimates by approximately 40,000 vehicles.

This represents a 13% year-over-year decline, marking Tesla’s worst quarterly performance drop in its history.

Political Distractions

Musk’s political activities have increasingly drawn attention away from Tesla. He has been heavily involved with President Donald Trump’s administration, helping to lead the Department of Government Efficiency (DOGE).

This work has proven controversial. Some analysts believe Musk’s political shift has alienated Tesla’s traditionally left-leaning customer base who prioritize environmental concerns.

Recent data points to continuing sales troubles. In April 2025, Tesla’s sales plunged 59% in France and 67% in Denmark compared to the previous year.

Perhaps sensing investor unease, Musk announced during Tesla’s recent earnings call that he would scale back his Washington commitments. “I will cut back significantly on the time I devote to the Trump administration and spend more time running Tesla,” he stated.

The Musk Factor

The Wall Street Journal report highlighted the board’s alleged concerns about Musk’s divided attention. According to unnamed sources, directors supposedly met with Musk to request he publicly acknowledge his commitment to spending more time at Tesla.

Wedbush analyst Dan Ives wrote that the situation revealed “just how tense the situation got between the Board and Musk,” but predicted Musk would “remain CEO for at least five years at Tesla.”

Many Wall Street analysts maintain that “Tesla is Musk, and Musk is Tesla.” This perspective is reflected in the stock’s valuation.

Some analysts estimate Tesla’s car business is worth roughly $100 per share, with the energy storage division worth another $100. The remainder of the stock price—currently around $283—represents what some call the “Musk premium.”

This premium highlights investor belief in future technologies championed by Musk, including self-driving cars and humanoid robots. However, these ventures have yet to generate major sales or profits.

Board Independence Questions

The Tesla board has faced criticism from activist investors who question its independence and ability to provide oversight of Musk. The eight-person board includes Musk’s brother Kimbal and James Murdoch, son of media mogul Rupert Murdoch.

According to the Wall Street Journal, some Tesla directors, including co-founder JB Straubel, have been meeting with major investors to provide reassurance about the company’s management.

Denholm herself has faced scrutiny over her compensation package and her defense of Musk’s controversial pay deal. Critics have questioned whether these factors compromise her oversight role.

In March 2025, Denholm sold approximately $33.7 million worth of Tesla stock, according to regulatory filings.

Tesla stock rose slightly in Thursday’s premarket trading, up 0.6% to $283.67. This modest gain came amid broader market strength following positive results from Meta Platforms and Microsoft.

Strategic Pivot

Tesla stands at a strategic crossroads. Musk has shifted focus from his earlier promise of developing an affordable EV platform to emphasizing driverless taxis and humanoid robots.

This pivot positions Tesla more as an AI and robotics company than a traditional automaker.

Last week, federal regulators eased rules for testing autonomous vehicles, providing a boost to Tesla’s stock and lending support to this strategic direction.

However, Tesla continues to face growing competition in the EV market. Rivals are gaining market share with newer models as Tesla’s lineup ages.

Musk’s recent pledge to refocus on Tesla operations may help address these challenges. As Wedbush’s Ives noted, “Musk is back in the driver’s seat at Tesla,” which could help stabilize the company during this turbulent period.

Tesla’s April sales data from European markets will be closely watched as an indicator of whether the company can reverse its recent downward trend.

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