Tesla's Board Seeks Musk Successor Amid 71% Profit Drop

Tesla’s board of directors has quietly begun the process of finding a successor to CEO Elon Musk. This move comes as the company faces several challenges, including declining sales and profits. The board has reached out to several executive search firms in the past month to identify potential candidates for the role.

The company is also looking to add an independent director to its eight-member board. This effort is part of a broader strategy to shore up confidence among major investors, who have expressed concerns about the company's direction and Musk's focus.

One of the primary concerns driving this search is Musk's increasing time away from Tesla. Musk has been dedicating significant hours to his role as head of the Department of Government Efficiency under President Donald Trump. During this period, Tesla's first-quarter profit dropped by 71%, and sales declined in key markets such as China, Germany, and California.

In response to these concerns, the board recently met with Musk and urged him to re-engage more actively with company operations. Musk has agreed to this request, stating during a recent earnings call that he will allocate more of his time to Tesla starting next month. However, it is unclear whether Musk is aware of the succession planning discussions or if his pledge to refocus on Tesla has affected the board's efforts.

Tesla's recent performance has been under scrutiny, with the company's Cybertruck failing to meet expectations and its pivot to AI and robotics, including the upcoming launch of a robotaxi service, yet to offset weakening EV demand. Musk, who remains a board member and owns roughly 13% of the company, has privately expressed frustration over working without pay since a Delaware judge voided his compensation package last year. The board has since formed a committee to revisit CEO compensation.