Cnn
–
Tesla president Robyn Denholm has rejected a Wall Street Journal report that the company’s board of directors started a research process for a new CEO to replace Elon Musk.
The newspaper reported on Wednesday that Tesla’s board of directors contacted the investment companies of managers in March to find the replacement of Musk, citing several unnamed sources.
Denholm declared in an article on the Tesla official account that the complaint was “absolutely false” and that the board of directors is “very confident in its ability to continue to execute on the exciting growth plan to come”.
The superb report has highlighted the volatility that the electric car manufacturer has faced in recent months, while Musk has spent a significant amount of his time working for the initiatives of the Ministry of Effectiveness of the White House (DOGE).
Tesla’s equity price (TSLA) fell up to 45% this year before recovering a little in the middle of a wider stock rebound. In April, the company reported a sharp drop in sales and profits in the first quarter, the profits being in a fall of 71% – a shocking report which may have been overshadowed by the announcement of Musk the same day that he would return from his government role and return to Tesla.
The newspaper said that it was not clear if Musk’s announced return changed the status of succession planning. Around the same time, the board of directors began to seek a new potential CEO, the administrators told Musk that he had to spend more time in the company, according to the report. Musk did not postpone, said the newspaper.
Analysts led by Dan Ives, a global manager of technology research at the Wedbush Securities financial services company, said that Musk “had done the right thing” by seating as CEO of Tesla, and expressed his confidence that he would remain in the role of “at least five years”.
“This situation with Musk AT DOGE reached a breaking point, but we think that the cooler heads have now prevailed and that the board of directors is no longer actively seeking to replace Musk as CEO and that this red code is now behind,” they said in a research note on Wednesday published before Denholm publishes a statement.
At a meeting of the cabinet on Wednesday, President Donald Trump thanked Musk for his service in his role as government – which ends up soon, although Musk should continue part of his work with the White House after his hindsight.
“You have been treated unfairly, but the vast majority of people in this country respect and really appreciate you, and this whole piece can say that very strongly. You have really been of great help,” Trump told Musk on Wednesday. “You are invited to stay as long as you want. At one point, I suppose, he wants to go home to his cars. ”
Musk, who was carrying a hat on another hat, joked: “Well, Mr. President, you know they say that I wear a lot of hats.”
Trump officials and members of the cabinet argued and the Treasury Secretary Scott Bessent launched in a cry match with Musk earlier this month.
But Musk has undoubtedly faced many more troubles in Tesla: the demonstrations outside the company’s exhibition halls have become routine. What was once a symbol of pride among environmentalists has now become a brand that faces significant and perhaps irreparable damage among its old bases of fans.
Before even playing a role in Trump’s White House, investors had criticized Musk for spending too little time in his listed business. Musk in 2022 bought Twitter, now X, and has spent a significant amount of its energy in recent years of radical reshaping of this company. Although he is no longer CEO, he plays an active role in his operations and was criticized for having participated in conspiracy theories, making sectarian statements and raising extreme right and Nazi propagandists.
Musk also directs SpaceX, a great government entrepreneur who benefits from his relationship with the Trump administration.
But Tesla was thrown in the midst of Trump’s damaging trade war with China. Although Musk has publicly pleaded for lower prices and has publicly disappeared with Trump’s best sales advisor, Peter Navarro, Musk seems to have made little progress with Trump, and Tesla China sales are threatened.
The recent Trump softening of its automotive prices plan, however, benefits Tesla in the United States because it manufactures most of its cars in America but imports many parts. These parts were to be invoiced a price of 25% from this weekend, but the recent executive actions of Trump will temporarily reduce this burden for American manufacturers like Tesla.
During his call last week with Tesla investors and analysts, Musk admitted: “There has been a flower blow since I went to government with the government’s ministry of efficiency.”
He announced that from May, he would go back from his job almost full at full time running Doge and spent only day or two per week on his efforts.
“My time allowance in Doge will drop considerably,” he said. “From next month, I’m going to allocate Tesla a lot more of my time.”
He suggested that he could move away because “the major work of the government’s establishment’s establishment is done.” But the evidence suggests that the potential buyers of Tesla have turned away from the company due to the highly publicized Musk support for the Trump administration as well as to the far -right political parties in Europe.
Tesla has just reported her worst drop in sales in her history, which led to a massive drop in profits during the quarter.
While Musk tried to reject the impact of demonstrations on sales and Tesla results, Tesla’s financial director Vaibhav Taneja, recognized the success of the controversy in the call with the investors.
“There was a lot of speculation about the reasons for the drop in deliveries of our vehicles in the first quarter,” he said. “The negative impact of vandalism and unjustified hostility towards our brand and our people had an impact on certain markets.”
In recent months, Musk has expressed a confidant that he no longer wanted to be CEO of Tesla, this person told the newspaper. Musk would have said that he feared that a replacement would not make his vision to make Tesla a company that sells autonomous vehicles like its main cases – but it was motivated from anyway, perhaps, after having lost another legal battle to receive its astronomical salary package, the most important for a registered public company.
Musk holds 410 million Tesla shares, equal to 12.8% of the actions in circulation of the company. He also obtained options to buy 304 million additional shares as compensation to direct the company since 2018.
However, this compensation plan was rejected twice by a state judge of Delaware, where Tesla was incorporated. Assuming that these options are restored, it would control 22.2% of the company’s shares.
Members of the board of directors of Tesla testified in the case of the Delaware court in 2022 that they thought it was necessary to grant Musk this massive set of purchase options because of the importance of keeping it involved and focusing on the management of Tesla.
