Tesla Board Opened Search for a CEO

With profits and stock price sinking, board members told Musk he needed to spend more time at company

- Emily Glazer, Becky Peterson & Dana Mattioli

About a month ago, with Tesla's stock sinking and some investors irritated about Elon Musk's White House focus, Tesla's board got serious about looking for Musk's successor.

Board members reached out to several executive search firms to work on a formal process for finding Tesla's next chief executive, according to people familiar with the discussions.

Tensions had been mounting at the company. Sales and profits were deteriorating rapidly. Musk was spending much of his time in Washington.

Around that time, Tesla's board met with Musk for an update. Board members told him he needed to spend more time on Tesla, according to people familiar with the meeting. And he needed to say so publicly.

Musk didn't push back.

Tesla has been on a losing streak in the months since Musk, its visionary chief executive, began spending much of his time helping President Trump slash federal spending. Last week, after the company said its first-quarter profit had plunged 71%, Musk told investors he would soon pivot back to his job at Tesla.

"Starting next month," he said on a conference call about earnings, "I'll be allocating far more of my time to Tesla."

The board narrowed its focus to a major search firm, according to the people familiar with the discussions.

The current status of the succession planning couldn't be determined. It is also unclear if Musk, himself a Tesla board member, was aware of the effort, or if his pledge to spend more time at Tesla has affected succession planning. Musk didn't respond to requests for comment.

During a cabinet meeting on Wednesday, Trump thanked Musk for his government work. "You know you're invited to stay as long as you want," Trump said. "I guess he wants to get back home to his cars."