Tesla stock held steady in early trading Thursday, following the company’s strong rebuttal of a Wall Street Journal article claiming a CEO search was underway. The EV pioneer firmly denied the report, which suggested board members had contacted executive recruiters to begin a formal hunt for Elon Musk’s successor—a claim that briefly pushed shares down 3% on Robinhood before they leveled out.
According to the article, unnamed insiders alleged Tesla’s board had initiated preliminary outreach to top search firms in anticipation of a leadership transition. Though the report lacked public confirmation, the reaction was swift. Tesla shares dipped overnight as speculation spread, fueling investor uncertainty until the automaker issued a clear public response that helped calm the market.
Robyn Denholm, Tesla’s board chair, swiftly took to social platform X to discredit the claims. Her post dismissed the report as “absolutely false,” adding that the board never approached recruiters about replacing Musk. Denholm emphasized that the board continues to stand behind its current CEO, doubling down on confidence in his ability to deliver on the company’s ambitious trajectory.
In a follow-up post, Denholm explained the misinformation had already been flagged to the media prior to the article’s publication. Her statement reiterated Musk’s role as CEO and underscored the board’s collective faith in his leadership. Denholm framed the report as baseless and out of sync with Tesla’s actual plans or internal discussions, hoping to quash any lingering doubts.
This controversy follows a rough patch for Tesla, marked by a noticeable decline in revenue and profit during the first quarter. Sales numbers missed analyst expectations, and Musk acknowledged that his involvement with the Trump administration might be taking a toll on investor confidence. He also confirmed his upcoming part-time role in a new government initiative starting in May.
Quarterly financials painted a challenging picture, with Tesla’s total revenue sliding 9% from a year earlier to $19.34 billion—missing LSEG’s $21.11 billion estimate. Even as the automaker continues pushing innovation, this dip suggests broader market headwinds and internal hurdles, including evolving production timelines and fluctuating demand, are weighing on its near-term outlook.
Vehicle sales revenue saw a 20% year-over-year slump, landing at $14 billion. The company attributed this decline to retooling efforts at its four plants in preparation for a refreshed Model Y, along with aggressive pricing strategies and promotional offers. Together, these factors applied downward pressure on both earnings and profit margins across the board.
Tesla’s net income plummeted 71% to $409 million, translating to 12 cents per share—well below the $1.39 billion, or 41 cents per share, reported in the same quarter last year. This stark drop illustrates the operational challenges Tesla faces in a competitive, cost-sensitive EV market undergoing rapid evolution and shifting consumer dynamics.
Since January, Tesla’s market value has taken a serious hit, with shares down over 30% year-to-date. The combination of falling profits, leadership speculation, and strategic uncertainties has clouded investor sentiment. Whether Musk and the board can turn things around will likely hinge on delivering consistent results—and clarity—amid an increasingly turbulent landscape.
