Tesla Board Seeks New CEO to Replace Elon Musk

Source Credit : CNBC

Shares of Tesla remained unchanged in premarket trading on Thursday following the electric vehicle manufacturer's dismissal of a Wall Street Journal article claiming that its board was actively seeking a new CEO to replace Elon Musk.

According to sources familiar with the discussions, the report stated that Tesla's board members have engaged with multiple executive search firms to establish a structured process for identifying the company's next CEO. In response to this news, Tesla's shares experienced a decline of up to 3% in overnight trading on the Robinhood platform, although they later recovered some of these losses.

Robyn Denholm, the chair of Tesla, took to the social media platform X to address a recent report, stating that it was "absolutely false." In her statement, she clarified that earlier in the day, there was a media report that inaccurately claimed the Tesla Board had reached out to recruitment firms to begin the search for a new CEO at the company.

"This claim is completely untrue, as was conveyed to the media prior to the report being released. Elon Musk serves as the CEO of Tesla, and the Board has full confidence in his capability to successfully carry out the company's ambitious growth strategy."

Following a significant decline in sales and profits, the electric vehicle giant experienced a shortfall in both its top and bottom lines during the first quarter. Elon Musk has acknowledged that his association with the Trump administration may be negatively impacting the company's stock price.

During a recent Tesla earnings call, the mega-billionaire announced his intention to dedicate a day or two per week to overseeing the Department of Government Efficiency starting in May.

In the January-March quarter, Tesla experienced a 9% decrease in total revenue, amounting to $19.34 billion. This figure fell below the $21.11 billion forecasted by analysts, as reported by LSEG data.

Revenue from Tesla's automotive segment decreased by 20% year-on-year to $14 billion. This decline was primarily due to the company's need to update production lines at its four vehicle factories in order to begin manufacturing an updated version of its popular Model Y SUV. Additionally, Tesla cited lower average selling prices and sales incentives as factors that negatively impacted both revenue and profit.

The company's net income drastically decreased by 71% to $409 million, or 12 cents per share, from $1.39 billion or 41 cents per share a year ago. Since the beginning of the year, the company's shares have plummeted by over 30%.