Tesla’s Leadership Crisis Deepens as Chair Denies CEO Replacement Reports
36min read In the shadow of Tesla’s plummeting stock and its CEO’s escalating political entanglements, Robyn Denholm, the electric vehicle giant’s chair, took an extraordinary step on May 1 to quash rumors of leadership upheaval. Her swift denial of a Wall Street Journal report claiming Tesla’s board sought a new CEO marked a pivotal moment in a saga that underscores the company’s existential risks—and its investors’ precarious position.
The Denial and Its Implications
The WSJ report, published on May 1, alleged that Tesla’s board had approached recruitment firms to search for a replacement for Elon Musk as early as mid-April. The purported reason? Concerns over Musk’s focus on his role in the Trump administration’s “Department of Government Efficiency” (Doge), which he joined earlier this year. Denholm’s response was immediate and unambiguous: “The CEO of tesla is Elon Musk,” she declared in a public tweet, calling the report “absolutely false.”
Yet the denial itself raised eyebrows. The board, she added, had already communicated its rejection of the claims before the WSJ published its story—a detail that suggests a breakdown in trust between Tesla’s leadership and the media. Musk amplified the rebuttal on his X platform, calling the article an “EXTREMELY BAD BREACH OF ETHICS” and accusing the WSJ of omitting the board’s objections.
The episode laid bare a growing rift. While Denholm insists Musk remains irreplaceable, Tesla’s financials tell a different story. In Q1 2025, the company’s profits plunged 71% to $409 million, as production bottlenecks and global protests over Musk’s far-right political alliances—such as his endorsement of Germany’s AfD party—sapped sales.
Financial Struggles and Leadership Divisions
Tesla’s stock has fallen 25% year-to-date, erasing billions in shareholder value. Analysts point to Musk’s dual role as both Tesla’s CEO and a senior Trump appointee as a key driver of instability. Denholm’s own actions further complicate the narrative: she sold $32 million worth of Tesla shares on May 1—the latest in a series of sales totaling $150 million since December. While Tesla insists these moves reflect personal financial planning, skeptics note Denholm retains 300,000 expiring stock options, raising questions about whether her liquidations signal a loss of confidence.
The board’s governance record isn’t helping. In 2024, a Delaware judge lambasted Denholm and her colleagues for approving an “excessive” pay package for Musk, a decision that prompted Tesla to reincorporate in Texas. The ruling highlighted a pattern: Denholm, who has earned over $680 million since joining Tesla’s board in 2014, has long faced criticism for prioritizing Musk’s vision over shareholder interests.
Denholm’s Stock Sales: A Sign of Concern or Prudent Planning?
Denholm’s recent trades are particularly striking. By May 2025, she had sold nearly half her holdings, reducing her stake from 412,830 shares to 299,440. Tesla’s legal team has attributed the sales to tax obligations tied to expiring stock options, a common corporate strategy. But with the board’s credibility already strained, the timing—coming amid the WSJ report and Musk’s political distractions—has fueled speculation.
Investors, too, are acting. Short interest in Tesla has surged, while institutional holders likeARK Invest have reduced their stakes. The company’s plans to allocate more of Musk’s time to Tesla starting May—a response to its profit slump—depend entirely on Musk’s ability to step back from Doge by May 30, as required by federal ethics rules.
Conclusion: A Precarious Balance
Tesla’s future hinges on two variables: Musk’s commitment to the company and Denholm’s ability to manage board dissent. With profits down, protests rising, and leadership stability in doubt, the May 1 denial was less a resolution than a distraction. The data is stark: a 71% profit drop, a 25% stock decline, and a chair selling millions of dollars in shares amid governance controversies paint a picture of a company at a crossroads.
For investors, the takeaway is clear: Tesla’s valuation depends not just on its electric vehicles, but on its leaders’ capacity to prioritize the business over political theater. Until that balance shifts, the red line on Tesla’s stock chart is unlikely to turn green.
