Elon Musk’s Inner Circle Reveals His Mental Collapse After Tesla Board Considered Forcing Him Out as CEO

Elon Musk’s tight grip on Tesla appears to be loosening—and for the first time in years, sources close to the embattled billionaire are painting a picture not of defiance or bravado, but of a man deeply shaken by the threat of losing the company that made him a global icon. Following the bombshell Wall Street Journal report that Tesla’s board of directors has quietly begun steps to consider replacing him as CEO, insiders say Musk has entered an emotionally volatile and mentally unstable state, marked by erratic behavior, long silences, and bursts of unfiltered rage.

Behind the curtain of public posts and corporate denials lies a very different Elon Musk, according to people familiar with his recent state of mind. Sources say that after receiving confirmation that the board had contacted executive search firms about potential replacements, Musk was “visibly shaken,” reportedly locking himself away in a private room at Tesla’s Austin headquarters for hours. “He felt blindsided. Betrayed. The mood was dark,” said one person who has worked closely with Musk for over a decade.

“This wasn’t just business to him—Tesla is part of his identity.”

The timing of the board’s internal maneuvering could not be more damaging for Musk. The first quarter of 2024 marked one of Tesla’s worst financial showings in years, with a catastrophic 71% plunge in net income and a 9% drop in year-over-year revenue.

Tesla’s earnings plummeted from $1.4 billion to just $409 million, and the company’s share price has lost more than $120 since Trump’s inauguration in January. While market analysts cite rising competition, a saturated EV market, and production slowdowns, many have pointed to one clear common denominator: Musk’s absence.

Since being appointed head of the controversial Department of Government Efficiency (DOGE) by President Donald Trump, Musk has spent a significant portion of his time in Washington, often seen more at cabinet meetings and political summits than on the factory floor or inside boardrooms. His decision to split his time between Tesla and what critics call a thinly veiled instrument of political cronyism has drawn the ire of investors, customers, and even some within Tesla’s own leadership structure.

Musk’s psychological state has reportedly deteriorated as the pressure mounts. While publicly, he has gone on the offensive—calling the Wall Street Journal article a “deliberately false” hit piece and accusing the media of “an EXTREMELY BAD BREACH OF ETHICS”—those close to him describe a man on the edge.

“He’s paranoid. He thinks people are plotting against him at every corner. It’s not the usual Elon Musk chaos energy—it’s darker now,” said another source inside Tesla’s executive wing.

His posts on X, the social platform he owns but no longer directly runs, have grown increasingly erratic. In response to the report, he fired off late-night tirades, labeling the Journal a “discredit to journalism” and denying that any legitimate search for a new CEO was underway. Tesla board chair Robyn Denholm echoed this in a public statement, declaring, “The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead.”

But behind that corporate optimism, murmurs of deepening boardroom tensions persist.

The Wall Street Journal noted in its report that Tesla had declined to provide comment prior to publication, despite being contacted. The lack of a proactive, unified denial from the board before the story broke has only fueled speculation that something serious may, in fact, be brewing behind the scenes.

Musk’s dual role as CEO and political operative has proven especially damaging to his reputation. His leadership at DOGE has become synonymous with mass firings, bureaucratic slashing, and unpopular federal policy experiments. Musk has become a lightning rod of backlash not only against Trump but against a broader vision of tech-billionaire-led governance.

Protests have erupted at Tesla showrooms across multiple states, and vandalism has been reported at Supercharger stations throughout Europe and the U.S. Meanwhile, critics point out the irony of the man promising government efficiency overseeing a company whose market value is collapsing amid stagnation and scandal.

Even Musk’s closest allies appear unable to shield him from the fallout. In one public meeting, Trump attempted to reassure him, saying Musk was “treated unfairly” and still respected by the public.

But the damage seems to have been done. Public confidence in Musk’s leadership is fraying. His presence at a Cabinet meeting wearing two stacked MAGA hats—offering a smirking quip about "wearing a lot of hats"—only added to the growing sense that he is more concerned with political theater than product pipelines.

And while Musk’s camp maintains that he will return his full attention to Tesla beginning in May, the board appears less willing to wait. According to WSJ, several directors began pushing for more serious conversations about succession as far back as late March. The concern was not just financial—it was existential. Could Tesla survive if its CEO continued treating it as a side project?

The unraveling of Elon Musk’s mental state has been particularly visible to those who’ve observed him during meetings. Once the sharp, dominating force in any room, he has recently been described as detached, sometimes silent for long stretches, only to suddenly burst into rage when questioned.

“He used to inspire fear and respect,” one insider noted. “Now it’s just confusion and concern.”

Adding to the psychological strain is the pressure from Musk’s other ventures—SpaceX, Neuralink, X, and The Boring Company—all demanding attention at a time when his leadership bandwidth appears to be running dangerously low. With each venture facing its own challenges, and DOGE drawing him further into politically volatile territory, the cumulative weight is beginning to crush even Musk’s famously resilient persona.

As of now, there has been no formal announcement from Tesla about any leadership transition. But if the current situation continues to deteriorate—and if Musk’s mental health worsens under the stress—it may no longer be a matter of whether the board acts, but when.

The irony is not lost on those watching closely. Musk, who once prided himself on disrupting entire industries, may now be disrupted by the very corporate structure he built to support his ambition. The tech titan who redefined electric vehicles and space exploration may soon face a harsh truth: even emperors can be overthrown from within.