Could Elon Musk Step Down as Tesla CEO? What We Know

Major investors have recently called for Elon Musk to step down as Tesla's chief executive officer, arguing that fresh leadership is essential as the company attempts to overcome its numerous current challenges.

Newsweek has reached out to Tesla via email for comment.

Why It Matters

The electric vehicle giant is battling weak sales across several markets, boycotts and protests at Tesla showrooms, and a stock price falling further from the record highs achieved in mid-December.

Alongside increased competition in the EV space, many have pointed to Musk's political activities and his role in the Trump administration as contributing to these difficulties. Marketing experts have told Newsweek that Musk's departure from the top Tesla role, a position he has held since 2008, might be the only way to save the company from its current woes.

What To Know

Since President Donald Trump's inauguration on January 20, Musk has spearheaded the Department of Government Efficiency's efforts to root out perceived instances of waste, fraud and abuse in the federal government.

However, his dedication to his new DOGE role has led Ross Gerber, an early Tesla investor, to advocate for Musk to step down and for new leadership to take the reins.

"He's been committed to his job in the government, that's where he's spending his time," Gerber told Sky News. "He is not running Tesla and that's why I'm going to say it: Tesla needs a new CEO."

Gerber's company, Gerber Kawasaki Wealth & Investment Management, owns around 262,000 shares in Tesla, according to a February filing with the Securities and Exchange Commission (SEC).

Investment manager Christopher Tsai recently told The Guardian that he hoped Musk's involvement with DOGE would be "short-lived" so that the CEO could spend more time on his businesses. According to the company's most recent SEC filing, Tsai's investment firm, Tsai Capital, holds around 70,000 shares in Tesla, comprising over a fifth of its total $137 million portfolio.

Musk has claimed that DOGE employees are working "120-hour" weeks and admitted that he himself is balancing his political role and business ventures "with great difficulty."

As well as a potential distraction risk, there are indications that Musk's political activities—including voicing support for far-right parties in Europe—have been cited as alienating Tesla's customer base and contributing to the company's declining global sales.

According to a 1,000-person survey conducted by electric-vehicle-focused outlet Electrifying.com in late January, 59 percent of potential car buyers in the United Kingdom had been discouraged from purchasing a Tesla due to the CEO. Sixty-one percent of current electric vehicle owners expressed willingness to consider a Chinese-made alternative.

This sentiment could feasibly extend to the United States, where a recent survey found that 53 percent of adults hold unfavorable views of Musk, compared to the 35 percent who view him positively.

However, other polls have found healthier support for DOGE's cost-cutting initiatives and Musk's influence in the White House.

Eric Schiffer, chair of private equity firm The Patriarch Organization, told Newsweek that customers Tesla might lose due to dissatisfaction with Musk could be offset by new "center-right" buyers who back DOGE's efforts.

Removing a CEO typically requires a decision by the board of directors. In publicly traded companies like Tesla, major stakeholders can apply enough pressure to force a change or push for a shareholder vote. However, the latter would require that the CEO doesn't own a controlling stake. Musk owns approximately 411 million Tesla shares—about 12.8 percent of the company—according to portfolio management service Whalewisdom.

What People Are Saying

Gerber Kawasaki Wealth & Investment Management President and CEO Gerber Ross told Sky News: "It's time for somebody to run Tesla. The business has been neglected for too long. There's too many important things Tesla is doing. So, either Elon should come back to Tesla and be the CEO of Tesla and give up his other jobs, or he should focus on the government and keep doing what he's doing but find a suitable CEO for Tesla."

Media and marketing consultant Omar Oakes told Newsweek: "Tesla's only option now is to remove Musk as CEO. They no longer have a free run at the EV market and it's time to put a grown-up in charge."

Warwick Business School marketing professor Hugh Wilson told Newsweek: "Musk is closely associated with the [administration's] anti-green policies, most recently including attacks on federal agencies managing the Great Lakes. His government-slashing is also unpopular precisely with the well-off liberals who form his core market."

"Traditional brand advice would be that Musk should either stop the politics or give up his CEO role. And many analysts are arguing anyway that Musk is just too thinly spread to continue as Tesla's CEO," Wilson added.

"That would make a difference with consumers over time—though it's worth noting that Volkswagen never fully recovered from its 2015 diesel emissions scandal, and it's questionable how successful Musk's appointing a CEO would be in separating him from the brand while he remains his ever-viral self."

However, Wilson said that Musk's proximity to the Trump administration could result in policy decisions that are favorable to Tesla down the line.

Entrepreneur Eric Schiffer, chair of The Patriarch Organization, told Newsweek: "Tesla may have challenges in the U.S. in the short run with those on the left refusing to purchase but balanced by center-right new customers embracing an America that won't go bankrupt."

What Happens Next

Musk has not indicated that he plans to step down. Aside from Gerber and Tsai—whose Tesla stakes pale compared to the combined holdings of investment giants Vanguard and BlackRock—no major investors have openly expressed strong opposition to Musk's ongoing leadership.