Tesla Denies Report of CEO Replacement Amid Elon Musk Controversy

Tesla refutes claims of seeking a new CEO to replace Elon Musk, sparking debate over leadership stability.

Tesla has strongly denied a report by the Wall Street Journal (WSJ) claiming that its board was planning to replace CEO Elon Musk, labeling the report “absolutely false.” The controversy, which unfolded on May 1, 2025, centers on Musk’s involvement with President Donald Trump’s administration, raising questions about Tesla’s leadership stability and corporate governance as the company navigates a turbulent period.

Wall Street Journal’s Claims and Tesla’s Response

On May 1, 2025, the WSJ reported that Tesla’s board had initiated a search for a new CEO, citing Musk’s deep engagement with Trump’s administration and his work on the White House’s Department of Government Efficiency (DOGE) initiatives. The report, based on unnamed sources, claimed the board contacted executive search firms in March 2025, concerned that Musk’s political activities were diverting his focus from Tesla. It also mentioned efforts by directors, including co-founder JB Straubel, to reassure investors, and plans to add an independent director to enhance oversight.

Tesla swiftly refuted the claims through its chair, Robyn Denholm, who issued a statement on the company’s official X account, calling the report “absolutely false.” Denholm expressed the board’s “high confidence” in Musk’s leadership, emphasizing his ability to drive Tesla’s growth plans. The denial, reported by outlets like Reuters and CNN Business, helped stabilize Tesla’s stock, which rose 2.8% in early trading after an initial dip.

Market Reaction and Broader Context

The WSJ report initially caused volatility in Tesla’s stock price, with shares dropping 3% overnight on trading platform Robinhood, as noted by CNBC. However, following Tesla’s denial, the stock recovered, trading flat in premarket sessions, reflecting renewed investor confidence in Musk’s continued role. This reaction highlights Musk’s critical influence on Tesla’s market perception, given his status as the company’s visionary leader.

The controversy comes amid heightened scrutiny of Musk’s leadership. His political activities, including his role in Trump’s DOGE initiatives, have sparked protests outside Tesla stores, as reported by The Guardian. Additionally, Musk’s recent decisions—such as firing Tesla’s charging team and threatening to halt AI development without a larger stake—have raised investor concerns, according to Electrek. Meanwhile, Denholm’s own $33.7 million stock sale in March has drawn criticism over her oversight role, though her spokesperson defended her compensation as fair.

Conflicting Narratives and Ongoing Uncertainty

The situation remains contentious, with Tesla and the WSJ standing firm on their positions. While Tesla’s denial has held as of May 1, 2025, at 07:34 PM +01, the WSJ reiterated its confidence in its sources, adding uncertainty to the narrative. This clash underscores the difficulty of verifying claims based on anonymous sources in high-stakes corporate matters, leaving stakeholders to navigate conflicting accounts.

To clarify the key points, the following table compares the WSJ report and Tesla’s response:

Implications for Tesla’s Future

The controversy highlights the challenges Tesla faces as Musk balances his role as CEO with political engagements. His involvement with DOGE has fueled speculation about his commitment to Tesla, while the board’s potential interest in adding an independent director suggests ongoing governance concerns, especially with family members like Kimbal Musk on the board. For now, Tesla’s firm support for Musk appears to have quelled immediate concerns, but the WSJ report hints at underlying tensions that may resurface.

Why This Matters

The debate over Musk’s leadership underscores Tesla’s reliance on his vision, while also exposing vulnerabilities tied to his political activities. As Tesla navigates a competitive EV market and global expansion, stability in leadership is crucial. The controversy could influence investor confidence, corporate governance reforms, and Musk’s future focus, making it a pivotal moment for the company’s trajectory.

Key Takeaways

• Tesla denies a WSJ report claiming the board sought to replace Elon Musk as CEO, calling it “absolutely false.”
• The WSJ cited Musk’s role in Trump’s administration as a reason for the alleged search, which began in March 2025.
• Chair Robyn Denholm reaffirmed the board’s confidence in Musk, leading to a 2.8% rise in Tesla shares after an initial 3% drop.
• The conflicting narratives between Tesla and the WSJ create uncertainty, with no further developments as of May 1, 2025.

Stay informed: Follow updates on Tesla’s leadership and corporate governance developments.

Sources: Reuters, CNN Business, The Guardian, CNBC, Electrek.