Tesla has firmly denied a recent report from The Wall Street Journal suggesting that the company’s board is actively seeking a replacement for its high-profile CEO, Elon Musk. The report, which claimed that Tesla’s board had engaged executive search firms to find a potential successor, initially caused Tesla shares to dip as much as 3% in overnight trading on the Robinhood platform. However, the stock later recovered to trade flat in premarket activity on Thursday.
Robyn Denholm, Tesla’s chairperson, swiftly addressed the report on the social media platform X (formerly Twitter), calling it “absolutely false.” Denholm stated, “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 Elon Musk, and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead.”
Financial Challenges Amid Leadership Rumors
The report and subsequent denial come at a challenging time for Tesla, which recently posted disappointing financial results for the first quarter of 2025. The EV giant reported a 9% year-on-year decline in total revenue, falling to $19.34 billion—well short of analysts’ expectations of $21.11 billion. Revenue from Tesla’s automotive segment, which accounts for the bulk of its earnings, dropped 20% year-on-year to $14 billion. The company attributed this decline to production line updates for its refreshed Model Y SUV, lower average selling prices, and increased sales incentives.
Tesla’s net income also saw a dramatic fall, plunging 71% year-on-year to $409 million, or 12 cents per share, compared to $1.39 billion (41 cents per share) in the same period last year. Since the start of 2025, Tesla’s stock has declined by over 30%, reflecting growing investor concerns about the company’s performance and Musk’s leadership.
Musk’s Role Under Scrutiny
Elon Musk’s leadership style and priorities have been the subject of increased scrutiny, particularly as he balances his role at Tesla with other ventures, including SpaceX and Twitter (now X). Musk himself acknowledged during Tesla’s recent earnings call that his involvement with the U.S. government’s “Department of Government Efficiency” may be negatively affecting the automaker’s stock price. He added that he plans to limit his time on government-related projects to “a day or two per week” starting in May.
While Musk’s larger-than-life persona has been a defining feature of Tesla’s brand, some analysts have questioned whether his divided attention is contributing to the company’s recent struggles. The sharp drop in Tesla’s sales and profits has fueled speculation about whether the company might benefit from a leadership change.
Market Reaction and Outlook
Despite the initial market reaction to the Wall Street Journal report, Tesla’s denial helped stabilize its stock in premarket trading. However, the company remains under pressure to address its financial challenges and reassure investors of its long-term growth potential.
Denholm’s public statement reaffirming the board’s confidence in Musk’s leadership may provide some short-term relief, but it remains to be seen whether Tesla can reverse its declining stock price and restore investor confidence in the face of intensifying competition in the electric vehicle market.
As Tesla navigates these turbulent times, all eyes will remain on Musk—not only as the company’s CEO but also as a key figure shaping its future.
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