Elon Musk's dual roles driving a Tesla leadership shake-up?

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Tesla's board is reportedly exploring options to replace CEO Elon Musk, citing concerns over his divided focus between the company and his political role in the Trump administration, as well as declining profits and sales.​

Board's concerns over Musk's commitments

According to a report by The Wall Street Journal, Tesla's board has initiated a search for a potential successor to Elon Musk. The board's concerns stem from Musk's involvement as head of the Department of Government Efficiency (DOGE) under President Donald Trump, which they believe has diverted his attention from Tesla's operations. Additionally, Tesla has experienced a 71% drop in quarterly profits and a decline in sales, prompting the board to consider new leadership to steer the company back on course.​

Elon Musk's response and political entanglements

Elon Musk vehemently denied the WSJ report, labeling it as a "deliberately false article" and criticizing the publication for ethical breaches. He emphasized that the Tesla board had not issued any statements supporting the claims.​

Musk's political activities have drawn scrutiny, particularly his role in DOGE, which aims to reduce federal spending and bureaucracy. While Musk claims DOGE has cut $160 billion in federal spending, experts question the accuracy of these figures, noting that actual federal expenditures have increased. Furthermore, legislative efforts to formalize DOGE's cost-saving measures have stalled in Congress.​

Public backlash and impact on Tesla

Musk's close association with President Trump, including a $250 million campaign donation, has led to public backlash against Tesla. An incident in Arizona, where a Tesla Cybertruck was set on fire, exemplifies the growing unrest. U.S. Attorney General Pam Bondi labeled the act as "domestic terrorism," highlighting the severity of the situation.​

The company's alignment with Trump's policies, which often contradict Tesla's sustainability mission, has caused confusion among customers and employees. This discord, coupled with declining sales and the underwhelming reception of the Cybertruck, has raised questions about Tesla's direction under Musk's leadership.​

Musk's future with Tesla

While Musk has indicated plans to reduce his involvement in government affairs and refocus on Tesla, the board's reported search for new leadership suggests a potential shift in the company's executive structure. The outcome of this leadership evaluation could significantly impact Tesla's future strategy and public perception.​