Tesla Turmoil as Shareholders Turn Against Musk Amid Massive Stock Crash

In a dramatic turn of events that has shaken the tech and automotive sectors alike, Tesla’s stock has plummeted, wiping out an astonishing $800 billion in market value. At the center of the storm is CEO Elon Musk, whose recent behavior and leadership choices have drawn fierce criticism from shareholders, including longtime Tesla bull and top investor Ross Gerber.

Gerber made headlines this week after publicly calling for Musk to step down, citing catastrophic mismanagement and a worrying level of indifference amid Tesla’s sharp decline.

As Tesla faces one of its most significant downturns in recent history, investors and analysts are scrambling to understand how a company once lauded as the future of transportation and clean energy has stumbled so spectacularly.

The unraveling appears to be a mix of self-inflicted wounds and a lack of coherent leadership, with Musk’s actions being increasingly viewed as erratic and harmful to the company's long-term prospects.

Tesla's current troubles didn’t emerge overnight. Over the past year, the company's share price has been under pressure from several converging factors.

Weakening demand in key markets like China, increasing competition from legacy automakers and EV startups, and macroeconomic headwinds such as high interest rates and global economic uncertainty have all played a role. However, analysts agree that the most damning influence on Tesla’s valuation has been the growing concern over Musk’s divided attention and controversial public persona.

Elon Musk, once seen as Tesla’s greatest asset, is increasingly being perceived as its biggest liability. His highly publicized takeover of social media platform X (formerly Twitter) has not only distracted him from Tesla’s core business but has also raised eyebrows over his priorities.

Musk’s late-night posts, often inflammatory or politically charged, have alienated large segments of Tesla’s customer base and investor pool.

“Investors expect leadership, not spectacle,” said Lydia Tran, an automotive analyst at Bernstein. “When you have your CEO more focused on tweeting memes and picking fights online than addressing investor concerns or product issues, confidence erodes fast.”

Beyond mere distraction, Musk’s actions have at times appeared actively destructive. His erratic decision-making and disregard for standard corporate governance have resulted in confusion and instability within the company.

Last quarter, Tesla made a surprise decision to slash prices across its vehicle lineup, a move Musk framed as a strategy to boost demand. Instead, it triggered a race to the bottom in the EV market, devaluing Tesla’s vehicles and tightening margins. The decision blindsided investors and led to concerns that Musk was steering the company without a coherent long-term vision.

Additionally, several high-level executives have departed Tesla in recent months, citing internal dysfunction and Musk’s unpredictable management style. The departures, including that of longtime CTO Drew Baglino, have left a leadership vacuum that further weakens investor confidence.

Musk’s ongoing legal troubles and personal controversies have also contributed to Tesla's tarnished image. From battling shareholder lawsuits to regulatory investigations into his public statements, Musk’s actions continue to generate negative headlines that ripple through Tesla's stock.

Perhaps most unsettling to shareholders is Musk’s apparent lack of urgency or contrition in the face of Tesla’s mounting losses. While most CEOs would be expected to engage in damage control, reassure investors, or roll out a strategic plan to reverse course, Musk has taken a markedly aloof stance.

In a recent investor Q&A, Musk brushed off concerns about Tesla’s tumbling stock price, insisting that “the market will figure it out eventually.” His dismissive attitude did little to calm the markets. Instead, it further inflamed fears that Musk is disconnected from the realities facing the company.

Even more concerning, Musk has made few appearances in media or public forums focused on Tesla, choosing instead to engage in controversial discussions unrelated to the company.

His continued emphasis on personal projects—including ambitions to build a new social media platform, neural tech, and space ventures—has led many to question whether Tesla remains his top priority.

“Tesla doesn’t need a part-time CEO,” said Gerber in a strongly worded statement. “It needs a leader who’s fully invested, emotionally and strategically. Right now, we don’t have that.”

As the losses pile up, shareholders are no longer staying silent. Ross Gerber’s call for Musk to resign marks a turning point in the relationship between Tesla’s leadership and its investor base.

Gerber, a well-known Tesla supporter and CEO of Gerber Kawasaki Wealth & Investment Management, has typically defended Musk’s unconventional style. But even he now sees the situation as untenable.

“I’ve stood by Elon through a lot,” Gerber said in a recent interview. “But what we’re seeing now is not visionary leadership—it’s negligence. Tesla shareholders deserve better.”

Gerber’s comments have sparked a broader conversation among institutional investors, with some reportedly exploring efforts to pressure Tesla’s board to consider succession planning or even formally evaluate Musk’s performance. While no concrete moves have been announced, the tone of investor communications has shifted from cautious optimism to outright frustration.

Shareholder advocacy groups have also begun voicing concerns about governance at Tesla, particularly the board’s apparent reluctance to challenge Musk. Critics argue that the board, largely composed of Musk loyalists, has failed to hold the CEO accountable or act in the best interest of shareholders.

The financial damage is hard to ignore. Tesla’s market cap has been slashed by over $800 billion, a staggering figure that puts the company’s valuation at levels not seen since 2020. Analysts warn that if current trends continue, Tesla could lose its dominant position in the EV market altogether.

Sales numbers are down, profit margins have shrunk, and several key projects—such as the much-hyped Cybertruck—face production delays and cost overruns. Once hailed as a revolutionary product, the Cybertruck’s rollout has been marred by quality issues and shifting timelines, casting further doubt on Tesla’s ability to deliver.

As competitors like BYD in China and Ford and GM in the U.S. ramp up their EV efforts, Tesla’s first-mover advantage is rapidly eroding. Investors worry that without a clear strategy and focused leadership, Tesla may fall behind in the very industry it helped create.

Whether Tesla can bounce back from this crisis remains uncertain. What’s clear is that a change in leadership or at least a significant course correction may be necessary to restore investor confidence and reinvigorate the company’s direction.

“Elon Musk is a brilliant innovator, but Tesla needs more than brilliance right now—it needs stability, focus, and responsibility,” said Tran. “Until that happens, the turbulence will likely continue.”

As pressure mounts and the stock continues its downward slide, all eyes will remain on Tesla’s board. Will they stand by Musk, or finally take action to safeguard the company’s future?

For now, Tesla’s fate hangs in the balance—its stock battered, its leadership questioned, and its once-unshakeable momentum now in serious doubt.