Tesla investors push for Musk to return full-time as CEO amid sales slump and political distractions

Tesla investors push for Musk to return full-time as CEO

A coalition of activist Tesla shareholders has demanded that CEO Elon Musk commit at least 40 hours per week to the electric vehicle maker, warning that his divided attention—particularly his involvement with the Trump administration—has hurt the company’s performance and reputation. The letter, sent Wednesday to Tesla board chair Robyn Denholm, reflects growing discontent among both investors and employees over Musk’s limited engagement with Tesla, the Washington Post reported.

The group, which includes the labour union-backed SOC Investment Group and several small investors, controls just under 8 million Tesla shares, a fraction of the company’s 3.2 billion total. But their criticism echoes broader concerns in the market after Tesla reported a 71 percent drop in profits and a 13 percent fall in sales for the most recent quarter. Analysts have linked much of the damage to Musk’s work with the controversial US DOGE Service, which has dominated his public schedule over the past year.

Letter highlights financial decline and board inaction

“The current crisis at Tesla puts into sharp focus the long-term problems at the company stemming from the CEO’s absence,” the shareholders wrote, accusing the board of failing to act in the best interests of investors. The letter referenced declining sales, human rights controversies, and Tesla’s faltering global image as signs that Musk’s distraction has serious business consequences.

Tesla’s stock, which peaked in December 2024, has dropped by about 24 percent since, though it has recovered slightly as Musk signalled a retreat from federal politics. Still, the letter adds pressure on a board that has long been accused of excessive loyalty to Musk.

Investors demand succession plan and board reform

The letter urged Tesla to begin planning for both short- and long-term leadership succession. It also called on Denholm to limit external commitments by board members and appoint at least one new independent director with no personal ties to existing members. Critics have often pointed to the board’s closeness with Musk—his brother Kimbal Musk sits on the board—as a governance weakness.

In a recent high-profile case, a Delaware judge struck down Musk’s $56 billion pay package on similar grounds, finding that the board lacked sufficient independence. That ruling led Musk to begin moving Tesla’s legal incorporation from Delaware to Texas.

Board denies CEO search rumours, but scrutiny grows

The Wall Street Journal reported earlier this month that Tesla’s board was quietly exploring a CEO search. Denholm denied the claim on X, writing that “the Board is highly confident in [Musk’s] ability to continue executing on the exciting growth plan ahead.” But shareholder concerns persist.

Many of the letter’s signatories also opposed the ratification of Musk’s 2018 pay package, citing his overwhelming number of other ventures as a red flag. “The Board continues to allow Musk to be overcommitted,” the group wrote last year, “not demanding that he devote his attention to his role as CEO and ‘Technoking’ of Tesla.”

Neither Musk nor Tesla have responded to the latest letter.