Prominent investors are urging Elon Musk to step down as Tesla’s CEO, arguing that the company needs new leadership to navigate its current difficulties.
The electric vehicle manufacturer is grappling with declining sales in multiple markets, public protests at its showrooms, and a stock price that has dropped significantly from its mid-December peak.
Why It Matters
In addition to intensifying competition in the EV sector, many critics believe Musk’s political activities and involvement with the Trump administration have exacerbated Tesla’s struggles. Marketing analysts told Newsweek that Musk’s resignation, after serving as CEO since 2008, might be the best solution to the company’s challenges.
Key Context
Since Donald Trump’s presidential inauguration on January 20, Musk has led the Department of Government Efficiency (DOGE) in its mission to eliminate waste, fraud, and abuse within the federal government.
However, his commitment to this political role has prompted Ross Gerber, an early Tesla investor, to call for new leadership at the company.
“He’s focused on his government responsibilities, and that’s where most of his time goes,” Gerber told Sky News. “He isn’t actively managing Tesla, which is why I believe it needs a new CEO.”
Gerber’s firm, Gerber Kawasaki Wealth & Investment Management, holds approximately 262,000 Tesla shares, as reported in a February Securities and Exchange Commission (SEC) filing.
Investment manager Christopher Tsai expressed similar concerns, telling The Guardian that he hoped Musk’s government role would be temporary so he could refocus on his businesses. Tsai’s firm, Tsai Capital, owns about 70,000 Tesla shares, making up more than 20 percent of its $137 million portfolio, according to its most recent SEC filing.
Musk has acknowledged the challenge of balancing his political duties with his business responsibilities, admitting that DOGE employees are working extremely long hours.
Beyond being a potential distraction, Musk’s political stance—including his endorsement of far-right parties in Europe—has reportedly alienated Tesla’s customer base, contributing to declining global sales.
A survey conducted by EV news outlet Electrifying.com in late January found that 59 percent of prospective car buyers in the UK were deterred from purchasing a Tesla due to Musk’s involvement. Furthermore, 61 percent of current EV owners said they would consider switching to a Chinese-made alternative.
Similar trends may be emerging in the U.S., where a recent poll showed that 53 percent of adults view Musk unfavorably, compared to 35 percent with a positive opinion.
However, other surveys indicate strong public support for DOGE’s cost-cutting measures and Musk’s influence in the White House.
Eric Schiffer, chairman of private equity firm The Patriarch Organization, told Newsweek that while some customers might abandon Tesla due to Musk’s controversies, new “center-right” buyers could be attracted by DOGE’s initiatives.
Could Musk Be Replaced?
A CEO’s removal typically requires board approval. In publicly traded companies like Tesla, major shareholders can exert pressure for a leadership change or demand a shareholder vote—provided the CEO does not hold a controlling stake.
Musk currently owns around 411 million Tesla shares, representing approximately 12.8 percent of the company, according to data from investment tracking service Whalewisdom.
Source: Newsweek
