Tesla board defends Musk amid investors’ concerns, report considers replacing him
Finding a new CEO will be very difficult, investors say
Tesla’s stock value depends mainly on Musk’s robot promise
By Rachael Levy, Abhirup Roy, Isla Binnie
May 1 – Tesla’s board of directors was eager to defend its CEO Elon Musk on Thursday and ensure his confidence in the board amid investors’ concerns about his long absence, polarized politics and lower sales and profits from EV manufacturers. The board of directors has considered replacing Musk, and the board chairman Robyn Denholm denied the board chairman, the board said in a Wall Street Journal report. Denholm himself was warmly welcomed for his high salary and believed that it had failed, making Musk responsible to shareholders. The latest Musk drama highlights the unique dilemma faced by Tesla’s board of directors when overseeing five other companies, and has recently been primarily advising Republican U.S. President Donald Trump – alienating Tesla’s politically free client base. However, according to investors, analysts and three of the debate knowledge about Tesla executives, few companies’ fates depend more on their CEO role, making him a huge risk. Many analysts attribute about three-quarters of Tesla’s stock market value to Musk’s promised autonomous driving technology and humanoid robots, but failed to launch it for years. Tesla Bulls sees Musk as a peculiar genius, and while in this technology, especially global competition from China, global competition in China has exacerbated this future, where automakers have blown Tesla in terms of producing low-cost electric cars.
Denholm appears to have denied the Journal Report, saying the board is “highly confident” and he can execute “exciting growth plans.” As the basic principles of Tesla’s automobile business continue to deteriorate, growth cannot be rapid. In Europe, Musk and Trump’s politics have proved particularly toxic, with sales of their electric car that have dropped particularly significantly.
Company insiders advised Musk that he had replaced himself in different ways over the years – by hiring executives as day-to-day managers, while Musk is increasingly like a figurehead, with two people familiar with the discussion telling Reuters. Other Musk companies operate in this way, most notably rocket maker SpaceX, with Gwynne Shotwell serving as president and chief operating officer.
The two said Musk had been refusing to do the same thing at Tesla.
Brian Mulberry, client portfolio manager at Tesla investor Zacks Investment Management, said the board will face huge difficulties. The “incredibly complex” challenge needs to fill Musk’s huge shoes and bridge the financial gap in his leadership – keeping Tesla’s struggling electric vehicle business profitable while providing long-term publicity for the “Robotaxi Network”. In the 10-point difficulty range, the replacement of Musk would be “eight or nine”, Mulberry said, adding that it would require someone with their own roles who can step into that and not always in Elon’s shadow.”
Gene Munster, managing partner of Tesla investor Deepwater Asset Management, said it is basically impossible to replace Musk.
He said: “Is musk bigger than Tesla? The answer is yes.”
Musk and Tesla’s board of directors did not respond to requests for comment. Musk honored his critics at a White House cabinet meeting on Wednesday, putting two ace caps on his head, one of which reads “America Bay.”
“They said I wore a lot of hats,” Musk said, causing Trump’s laugh. “Yes.”
Any successor may then have to deal with Musk as a board member and the company’s largest shareholder. He currently holds a 13% stake.
Tesla’s executive bench has thinned over the past year as Musk has moved the company away from its long-standing goal of becoming an EV giant focusing on robots, robots and artificial intelligence. Refusing to transfer Tesla to its core business that drives cars, including resisting Tesla’s core business, according to three discussions about the knowledge among Tesla executives. Some of them have raised concerns to the board and supported Musk, people say.
Gary Black – managing partner of Tesla Investor’s Future Fund – wrote on Musk’s platform X that the company has no viable internal executives to replace him.
“We don’t see anyone with a wide range of technology, strategy and execution skills.”
Tesla private investor James McRitchie said he doubted board members would oppose Musk because of his appointments and unusually high salaries. McRitchie acknowledges the risk of replacing musk.
“A lot of the stock price has to do with Elon’s love, letting the robot do everything for us,” he said.
McRitchie compared Musk with legendary GE CEO Jack Welch, which investors see as “God.”
“But when he left, it was a house of cards,” he said. “I think Tesla might be the same. It’s a good company, but it’s probably a better company and it deserves praise.”
Zacks’ Mulberry said Tesla could succeed with or without musk.
“You already have a lot of electric cars, have robots and fully autonomous driving,” he said. “Now, it’s just managing it to a point of completion… Do you really need another wave of innovation from Tesla, or do you just need to perform properly?”
This article was generated from the Automation News Agency feed without the text being modified.
