2025-05-01T01:19:13Z

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By Abhirup Roy and Bipasha Dey

(Reuters) - In a recent development, Tesla's Chairwoman, Robyn Denholm, publicly refuted a report from The Wall Street Journal that claimed the company's board had engaged multiple executive search firms to identify a successor for CEO Elon Musk. This statement came during a period of scrutiny surrounding Musk's leadership and his political entanglements.

Denholm addressed the speculation on Thursday, asserting that the report was "absolutely false." She expressed the board's unwavering confidence in Musk's abilities to guide Tesla through its ambitious growth trajectory, stating on X, "The board is highly confident in Elons vision for Tesla." Following her remarks, Tesla shares experienced a notable uptick, rising by 2.8% in early trading.

The Wall Street Journal defended its reporting, citing sources familiar with internal discussions that suggested the board's motivation for seeking a new CEO stemmed from Musk's significant involvement with former President Donald Trump's administration. However, the Journal also clarified that the current status of any search for Musk's replacement remained unclear.

Musk took to X to denounce the article, labeling it a "deliberately false article" aimed at undermining his leadership. This public rebuttal highlights the ongoing tensions within the company and the scrutiny Musk faces from both investors and the media.

For years, activist investors have raised concerns about Tesla's board, alleging a lack of independence and accountability, particularly regarding Musk's decision-making. This criticism has resurfaced at a time when Tesla finds itself at a strategic crossroads. Musk has shifted focus from developing an affordable electric vehicle (EV) platform to prioritizing the rollout of autonomous taxis and humanoid robots, signaling a transformation for Tesla from a traditional automaker to a pioneer in artificial intelligence and robotics.

This shift in vision is pivotal, as much of Tesla's market valuation is now tied to its potential in AI and robotics. Some investors speculate that Musk's relationship with Trump may facilitate advancements in this area. Recently, federal regulators relaxed testing regulations for autonomous vehicles, a move that has provided a significant boost to Tesla's stock price.

However, it is essential to note that Tesla's stock has faced substantial volatility in recent months. The company's EV sales have dwindled in both the U.S. and European markets, primarily attributed to a backlash against Musk's political affiliations and the emergence of competitors with innovative model offerings. Reports indicate a drastic decline in Tesla's sales, with figures showing a staggering 59% drop in France and 67% in Denmark when compared to the previous year.

Musk's activities in Trump's administration, particularly his role in initiatives aimed at federal job reductions, have not only fueled discontent among U.S. consumers but have also led to widespread criticism internationally. Many investors are increasingly worried about Musk's divided attention and its impact on Tesla's operational management.

In a bid to address these concerns, Musk announced last week his intention to significantly reduce his involvement with the Trump administration, emphasizing his commitment to focus on Tesla's operations. This promise came in the wake of growing protests against him and the company, along with incidents of vandalism targeting Tesla's showrooms and charging stations in multiple countries.

According to the Wall Street Journal's report, board members engaged in discussions with Musk, urging him to publicly reaffirm his commitment to prioritizing his role at Tesla, reflecting the urgent need for clarity amidst rising investor anxiety.