Tesla's board quietly began its search for a potential successor to CEO Elon Musk about a month ago, reaching out to executive recruiters. It came just as Tesla showrooms were blocked by protesters and the electric carmaker's sales and profits began to fall, The Wall Street Journal reported.
According to insiders, Tesla board members met with Musk to express concerns about his political activities. Earlier this year, Musk headed the Department of Government Efficiency (DOGE) in Washington. During this meeting, the directors urged Elon to devote more time to Tesla and publicly confirm his commitment to the company. Musk did not object and later told investors that starting in May he would "dedicate significantly more time to Tesla."
Musk's parallel government stint coincided with Tesla's first annual sales decline in more than a decade and a 71% decline in quarterly profit. The company also reported a 9% decline in revenue in its most recent financial report. Tesla's market value has fallen from about $1.5 trillion in December to about $900 billion today.
Despite these difficulties, Musk remained optimistic during last week's earnings call, assuring shareholders: "We are not on the brink of disaster."
It is currently unknown whether Tesla's board of directors is still looking for a replacement for Musk and whether he was aware of the initial contacts with recruiters.