Tesla stock falls over 4% as company looks for a CEO to replace Elon Musk: Report
Tesla board members, about a month ago, reached out to several executive search firms to find a successor for CEO Elon Musk, the Wall Street Journal reported on Wednesday, citing people familiar with the discussions. Tesla stock, $TSLA, has since fallen over -4% in overnight trading.
The outlet reported that the hunt for the new CEO began after Tesla’s stock started sinking, and investors got upset after Elon Musk’s focus shifted to the White House.
BREAKING: Tesla stock, $TSLA, falls over -4% in overnight trading as WSJ reports that the company’s board has begun a search for a CEO to succeed Elon Musk. pic.twitter.com/cNn4TRsC1M
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During a meeting with Tesla’s board of directors, Elon Musk was told that he needed to give more time and attention to Tesla and also to publicly acknowledge this increased commitment to the company, WSJ reported, citing people who are familiar with the development.
“Starting next month, I’ll be allocating far more of my time to Tesla,” the outlet quoted him as saying on a conference call about earnings.
Musk has been running the American automotive and clean energy company since 2008. He stepped down as the chairman of the Tesla board in 2018. Despite that, he was very involved in all of the operations of his business.
While there have been reports that the board is looking for someone for the leadership role to replace Musk, it is unclear if Musk himself is aware of the development. It is also unclear if his pledge to spend more time at Tesla has affected the hunt for the CEO.
Quoting people familiar with the development, WSJ report stated that the Tesla board, which consists of eight members, has been looking for an independent director and for this, a few of them, including Tesla co-founder JB Straubel, have been meeting people for investments, reassuring them that all is well at the company.
Musk’s “friendship” with Trump and federal job cuts have led to anti-Musk campaigns, where people have not only plastered stickers onto cars from EV maker Tesla, reading, “I bought this before Elon went crazy.” People have also vandalised Tesla showrooms and charging stations. While all this was already bad for business, Trump’s April 2 tariffs made the situation worse for Tesla. Trump levied 145% tariffs on China, which is one of Tesla’s biggest supply chains. Additionally, Tesla relies on parts and materials from Mexico and Canada to build its cars in the US. If the tariffs also affect imports from these countries, it raises Tesla’s production costs and complicates logistics.
The report said that Musk told investors that he would “continue advocating for lower tariffs” but added that it is all he can do as the “decision lies with the president”.
Last year, he, as per WSJ, confided in someone that he no longer wanted to be the CEO of Tesla but was “worried that no one could replace him atop the company and sell the vision that Tesla isn’t just an automaker, but the future of robotics and automation as well”.
It is to be noted that Tesla shares saw a jump after Trump won the November election and returned to the White House. Tesla’s total market value hit a record high of $1.5 trillion in December. However, since that peak, Tesla’s value has dropped to about $900 billion.