Tesla navigates uncertainty: CEO search rumors and financial woes
Tesla was reportedly set to start the search for a new CEO due to the company's weak financial performance and controversies involving Elon Musk, according to CNBC. However, Tesla's chair, Robyn Denholm, has denied these claims.
Tesla has begun the search for a new CEO, leading to a 3 percent drop in its shares on the Robinhood platform, as reported by CNBC.
Will Musk lose his position at Tesla? The company responds
Adding to the speculation, the "Wall Street Journal" noted that the company's board has reached out to several recruitment agencies to potentially find Elon Musk's successor.
The board's decision follows the company's unsatisfactory financial results and ongoing controversies concerning Elon Musk.
Robyn Denholm, Tesla's chair, has dismissed the reports suggesting the board is looking to replace Elon Musk, emphasizing that the executives are "higly confident" in his abilities, according to Bloomberg.
"The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead," reads part of the company's official statement.
Elon Musk's activities as a Trump advisor and head of DOGE are deemed highly controversial, according to Bloomberg.
Tesla has faced various challenges in Europe and the United States since Musk became a close advisor to Trump and assumed a leadership role at DOGE. In some cases, attacks on Tesla vehicles escalated into acts of vandalism. The company announced on Tuesday that its earnings for the first quarter of this year had fallen by 71 percent.
Tesla's sales plummet
Sales of Tesla electric vehicles in the EU decreased by 36 percent in March compared to March 2024. Additionally, in the first quarter of this year, sales nearly halved year over year, according to the AFP on Thursday, citing information from the European Automobile Manufacturers Association (ACEA).
Recently, Tesla presented financial results for the first quarter that were below analysts' expectations, with automotive revenue dropping by 20 percent compared to the previous year.
The company's total revenue amounted to $19.34 billion (26.73 billion CAD), falling short of the consensus estimate of $21.11 billion (29.18 billion CAD). Total revenue decreased by 9 percent from $21.3 billion (29.44 billion CAD) the previous year. Automotive revenue experienced a 20 percent decline, falling to $14 billion (19.35 billion CAD) from $17.4 billion (24.05 billion CAD) in the same period last year.
Net income fell by 71 percent, dropping to $409 million (565 million CAD) from $1.39 billion (1.92 billion CAD) the year prior.
Tesla identified the necessity to update production lines in four vehicle factories to start manufacturing a refreshed version of the popular Model Y SUV as a reason for the decline. The company also cited lower average selling prices and sales incentives as factors weighing on revenue and profitability.
Tesla's shares have declined by 41 percent since the start of 2025, experiencing the worst quarterly dip since 2022 in the period ending in March.
