“Code Red” Behind the Scenes: Tesla Considered Replacing Elon Musk

A Quiet Crisis in the Boardroom

Back in March, Tesla quietly entered a serious leadership crisis. According to The Wall Street Journal, the board reached out to multiple executive search firms to explore the possibility of finding a new CEO. The goal: to identify a potential replacement for Elon Musk — the man who has long been the face of Tesla. It all happened behind closed doors, and sources say it’s unclear whether Musk himself was aware of the plan.

A Board Under Pressure

The dramatic move came after Tesla posted historically poor results. The company reported a 71% drop in profits and the largest sales decline in its history. At the same time, Musk had been heavily involved with the White House, leading the Department of Government Efficiency (DOGE). Sources say the board told him directly that he needed to spend more time at Tesla. Musk reportedly didn’t push back.

Meanwhile, protests against Tesla intensified globally, especially among former fans and environmental groups, who now saw the brand as compromised. During an investor call, CFO Vaibhav Taneja acknowledged that vandalism and hostility toward Tesla had negatively impacted sales in some markets.

Musk Steps Back from Government Work

On the same day Tesla revealed its dismal financial results, Musk announced he would be stepping back from his government role. “My time allocation to DOGE will drop significantly,” he told investors, adding that beginning in May, he would shift his focus back to Tesla.

Dan Ives, Global Head of Technology Research at Wedbush Securities, called the move “the right thing to do” and predicted Musk would remain CEO for “at least five more years.” Ives added, “The situation with Musk at DOGE was reaching a breaking point, but we believe it’s now under control.”

A CEO on His Way Out?

Yet, the question remains: is Elon Musk still motivated to lead Tesla? According to a confidant, Musk has privately expressed a desire to step down — especially after losing another legal battle over his massive pay package. A court in Delaware has twice struck down the stock options that could give him control over up to 22% of the company.

Musk is still deeply involved with SpaceX and plays an active role in X (formerly Twitter), where his online behavior has sparked multiple controversies. Many investors worry that his divided attention is eroding confidence in Tesla.

Trump, Support, and Strain

At a recent cabinet meeting, President Donald Trump thanked Musk for his government service, saying: “You’ve been treated unfairly, but people in this country respect you. You’ve been a tremendous help.” Musk, wearing a hat stacked on top of another hat, joked, “Well, Mr. President, you know they say I wear a lot of hats.”

Although Musk’s relationship with Trump offers political advantages, it has also caused friction — especially in China, where the ongoing trade war threatens Tesla’s sales.

Our team may have used AI to assist in the creation of this content, which has been reviewed by our editors.