The WSJ report, citing sources familiar with the matter, indicates that these exploratory conversations began approximately a month ago. The impetus behind this search stems from apprehension surrounding Musk's extensive involvement in the Trump administration, particularly his work with the Department of Government Efficiency (Doge), where he has spearheaded federal job reduction initiatives.
This political engagement has sparked controversy and raised concerns among Tesla investors, particularly amid declining sales of the company's existing electric vehicle (EV) models. Furthermore, Musk's embrace of far-right political ideologies in Europe has triggered protests and vandalism targeting Tesla showrooms and charging stations across the United States and Europe, further amplifying investor unease.
In response to these concerns, Tesla board members reportedly met with Musk, urging him to publicly commit to dedicating more time to the company. Last week, Musk publicly stated he would scale back his involvement with the Trump administration to focus more on Tesla. However, it remains unclear whether Musk, who also serves on the Tesla board, is aware of the succession planning efforts or if his pledge has altered the board's course of action.
Tesla's current strategic direction is also a point of contention. Musk has pivoted from his initial promise of developing an affordable EV platform to emphasizing driverless taxis and humanoid robots, positioning Tesla as an AI and robotics company rather than a traditional automaker. This shift, while potentially lucrative, has raised questions about the company’s core business model. Recent regulatory changes easing autonomous vehicle testing, potentially benefiting Tesla, have been viewed positively by some investors, who see the Trump administration as a facilitator of this new direction.
To address investor concerns, some Tesla directors, including co-founder JB Straubel, have reportedly engaged with major investors to reassure them about the company's stability. However, activist investors have long criticized Tesla's board for its perceived lack of independence and its failure to effectively oversee Musk.
Board Chair Robyn Denholm, appointed by Musk and a staunch defender of his controversial compensation package, has also faced scrutiny regarding potential conflicts of interest. Denholm has refuted these allegations, and a spokesperson has asserted that her compensation is fair.
The eight-member Tesla board, which includes Musk's brother Kimbal Musk and James Murdoch, son of media mogul Rupert Murdoch, is reportedly seeking to add an independent director. This move could potentially address concerns about board independence and strengthen oversight of the company's operations and strategic direction.