Tesla Board Backs Elon Musk Amid Succession Rumors
In early May 2025, a Wall Street Journal exposé claimed Tesla’s board of directors quietly initiated a CEO succession search, prompting a swift and public denial from the company. This report comes amid concerns over Elon Musk’s time allocation to White House advisory projects and Tesla’s recent financial performance. Here, we dissect the original allegations, Tesla’s rebuttal, and the broader technical and governance implications for the automaker.
Allegations of a CEO Search
The Wall Street Journal reported that around April 2025, Tesla’s eight-member board “got serious about looking for Musk’s successor.” According to anonymous sources, directors engaged multiple executive search firms to formalize a process for appointing a new chief executive.
- Report date: Early April 2025
- Sources: Unnamed people familiar with board discussions
- Trigger: Tesla’s stock slide and concerns over Musk’s Washington commitments
Board’s Official Denial
Within hours of publication, Tesla’s official X (formerly Twitter) account shared a statement by board chair Robyn Denholm:
“There was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search. 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.”
Musk himself blasted the Journal for an “EXTREMELY BAD BREACH OF ETHICS,” claiming the paper omitted an unequivocal denial submitted prior to publication.
Context: Musk’s White House Role and Tesla’s Performance
At the time of the alleged outreach, Tesla shares had fallen more than 15% year to date. Insiders cited investor frustration over Musk’s involvement in the White House’s Department of Government Efficiency (DOGE) initiative, leaving less bandwidth for Tesla’s operational oversight. In an April 22 call, Musk countered:
“Starting next month, I’ll be allocating far more of my time to Tesla now that the major work of establishing the Department of Government Efficiency is done.”
Implications for Tesla’s Governance and Board Dynamics
Corporate governance experts say this episode underscores inherent conflicts in Tesla’s board structure. A 2024 Delaware court ruling invalidated Musk’s $55.8 billion pay package, noting several directors—including Musk’s brother Kimbal and friend James Murdoch—had close personal or financial ties to the CEO.
- Conflict of interest: Board members perceived as beholden to Musk
- Oversight concerns: Chair Denholm criticized for “lackadaisical” governance
- Best practice: Independent compensation committees recommended by ISS and Glass Lewis
Technical Impact on Product Roadmap
Musk’s allocation of attention directly feeds Tesla’s R&D cadence. Key engineering projects potentially affected include:
- Full Self-Driving (FSD) Beta: Running on Tesla FSD Computer HW4, built around Tesla’s in-house Neural Net chip with 36 TOPS per chip.
- Dojo Supercomputer: High-throughput AI training clusters capable of 1 exaflop performance, critical for refining vision-based autonomy.
- Giga Factory expansions: Rollout of 4680 cell production lines in Berlin and Texas, boosting energy density by 16% and reducing pack cost.
Analysts at Bernstein note that any leadership vacuum could slow down firmware over-the-air (FOTA) updates and delay the anticipated robotaxi launch slated for late 2025.
Expert Opinions and Market Reaction
Jane Hwang, a corporate governance specialist at Institutional Shareholder Services, comments:
“Tesla’s board needs demonstrable independence to satisfy proxy advisors. Repeated rumors of a CEO search highlight the urgency of governance reforms.”
Meanwhile, Wedbush Securities adjusted its target price to $225 from $235, citing concerns over executive focus rather than core automotive fundamentals.
Future Outlook
Whether or not Tesla ever formally considers succession planning, this saga highlights critical intersections between leadership, advanced AI development, and global manufacturing scale. Investors will be watching Tesla’s Q2 earnings—scheduled for late July 2025—for signs of renewed R&D investment and margin stabilization.