Tesla Stock Plunges as Board Begins Secret CEO Search to Replace Elon Musk Amid Profit Collapse

Tesla's financial foundations were rocked once again as shares of the electric vehicle behemoth tumbled up to 3% in after-hours trading on Robinhood. The sudden dip came on the heels of a bombshell Wall Street Journal report revealing that Tesla's board of directors has begun quietly reaching out to executive search firms in preparation for a possible transition of leadership—a move that would dethrone the company’s iconic CEO, Elon Musk.

This developing story has sent shockwaves through Wall Street and Silicon Valley alike, highlighting deep concerns within Tesla’s inner circle about the company’s future under Musk’s increasingly divided attention.

The covert search for a successor is reportedly in full swing, according to sources familiar with the matter. Tesla’s board has reached out to several top-tier recruitment firms to begin identifying candidates capable of steering the company into a more stable and focused era.

This strategic pivot comes just days after Tesla released its disappointing Q1 earnings, which showed a dramatic shortfall in both revenue and net income, triggering investor anxiety and eroding confidence in Musk’s leadership at a time of critical transformation for the brand.

In the first quarter of the year, Tesla reported total revenue of $19.34 billion, a steep 9% drop compared to the same period last year and notably below the $21.11 billion forecast projected by analysts using LSEG data. The company’s bread-and-butter automotive segment suffered a staggering 20% year-over-year decline, plunging to $14 billion.

Analysts and insiders attribute this nosedive to several compounding factors—namely the temporary closure and reconfiguration of production lines to accommodate the upcoming refresh of the Model Y SUV, aggressive discounting strategies, and diminished average selling prices across its vehicle lineup.

The profit picture is even more grim. Tesla’s net income fell off a cliff, dropping 71% to just $409 million, or 12 cents per share, compared to $1.39 billion, or 41 cents a share, in the same quarter last year. These results have rattled investors and analysts, many of whom have warned for months that Tesla’s once-invincible status in the electric vehicle market is increasingly under siege.

But what’s especially concerning to shareholders is not just the faltering numbers—it’s the sense that the company’s CEO is no longer fully present. Elon Musk, long regarded as the visionary behind Tesla’s meteoric rise, appears to be drifting from the core operations of the company.

During a recent earnings call, Musk disclosed that starting in May, he intends to spend just “a day or two per week” at Tesla, dedicating the rest of his time to leading the federal government’s new initiative dubbed the Department of Government Efficiency (DOGE), launched in collaboration with U.S. President Donald Trump. 

This declaration has been widely interpreted as yet another example of Musk spreading himself too thin across his vast empire of ventures—including SpaceX, Neuralink, X (formerly Twitter), and now a role in federal government operations.

Investors are growing increasingly impatient. Since the beginning of 2025, Tesla’s stock has plunged more than 30.13%, wiping out tens of billions in market capitalization and heightening pressure on the board to act decisively.

Behind closed doors, it appears that action is indeed being taken—though not with Musk’s full awareness or approval. Sources suggest the board’s initial discussions about replacing Musk began shortly after Tesla’s sales downturn became evident and concern grew over Musk’s political alignment and governmental distractions.

Tesla’s current predicament is as much a leadership crisis as it is a financial one. While product updates such as the Model Y refresh are underway, many argue that Tesla has failed to deliver truly new or disruptive vehicles in recent quarters.

Meanwhile, competitors such as BYD in China and legacy automakers in Europe and the U.S. are rapidly catching up, eroding Tesla’s first-mover advantage. With production lines paused and discounts eroding margins, the company finds itself caught between reinvention and stagnation.

All of this is unfolding under the cloud of a CEO who appears more engaged with Washington D.C. policy meetings than production floor logistics in Fremont or Shanghai.

Moreover, Musk’s polarizing political stances and increasingly erratic public behavior have tarnished Tesla’s brand appeal in certain key markets. The controversy surrounding his role in the Trump administration has not only provoked backlash from progressive consumer segments but has also reportedly contributed to a rise in vandalism at Tesla dealerships and charging stations in both the U.S. and Europe.

The combination of political overexposure, falling profits, and strategic drift has left Tesla’s board with few options—one of which appears to be exploring the unthinkable: life after Elon Musk.

Whether the board can successfully navigate such a high-stakes transition remains to be seen. Elon Musk’s persona is not only synonymous with Tesla—it is deeply embedded into its culture, investor base, and marketing DNA. The idea of replacing him is not just a personnel issue; it is a psychological and strategic risk that could rattle markets, embolden competitors, and create rifts within Tesla’s own executive ranks.

Nonetheless, board members seem to be quietly laying the groundwork for that possibility, perhaps driven by a sense that the window for corrective action is closing fast.

There are no immediate indications of who could be in line to replace Musk, should the board decide to move forward. High-profile names in the tech and auto sectors are likely to be considered, though any candidate would have to contend with the long shadow Musk casts over the company. Internally, few executives have the public recognition or internal support to match Musk’s profile, though some argue that a more traditional, operations-focused CEO could restore discipline and focus at a time when execution is more urgent than vision.

The broader implications of Tesla’s current turmoil stretch far beyond one company. Tesla has long been viewed as a bellwether for the electric vehicle industry and a symbol of disruptive innovation. Its success—or failure—has the potential to influence everything from stock market sentiment to federal policy on clean energy.

If Tesla continues to falter, or if its leadership crisis deepens, it could send ripple effects through adjacent industries and tech sectors that rely on Tesla’s stability and vision.

For now, the market is reacting swiftly to the uncertainty. A 3% drop in after-hours trading may seem modest in isolation, but it caps off a brutal run for Tesla’s stock that has left long-term investors disillusioned and short sellers emboldened.

Many are now watching closely to see whether Musk responds publicly to the board’s reported actions—and if he will fight to maintain his role, or step aside voluntarily for the good of the company he built.

Whatever happens next, one thing is certain: the era of unquestioned confidence in Elon Musk’s leadership at Tesla is over. As the numbers fall and the whispers grow louder, the board appears ready to chart a new course—one that might not include the man who made Tesla a global powerhouse.