A bunch of main Tesla shareholders is asking on CEO Elon Musk to recommit his consideration to the electrical car firm, citing declining gross sales, reputational harm and the CEO’s rising checklist of out of doors ventures — together with a now-concluded stint within the Trump administration.
In a letter despatched Wednesday to Tesla board chair Robyn Denholm, the traders urged the board to require Musk to spend a minimal of 40 hours per week on the firm and to undertake new governance insurance policies that might restrict administrators’ exterior commitments.
Additionally they known as for a proper CEO succession plan and not less than one new unbiased board member with no private ties to Musk or his allies.
“Tesla’s stock price volatility, declining sales, as well as disconcerting reports regarding the company’s human rights practices, and a plummeting global reputation are cause for serious concern,” the letter states. The letter’s contents had been reported by CNBC.
“Moreover, many issues are linked to Mr. Musk’s actions outside of his role as Technoking and Chief Executive Officer at Tesla, including his high-profile role as an architect of the US Department of Government Efficiency (DOGE).”
Musk’s time at DOGE — a federal company he helped lead as a part of the Trump administration’s second time period — formally ended this week, as his 130-day restrict as a particular authorities worker expired.
“The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government,” Musk wrote on social media Wednesday, including in a separate put up: “Thank you President Trump for the opportunity to reduce wasteful spending.”
However for some Tesla traders, his authorities work is emblematic of a deeper downside: a CEO more and more distracted from the corporate’s core mission at a time when it faces mounting headwinds.
Tesla’s gross sales have slumped, with European deliveries in April down practically 50% from the identical month final yr. First-quarter international EV gross sales additionally declined year-over-year, and the corporate’s inventory has fallen 12% in 2024 — sharply underperforming the Nasdaq, which is down about 1% over the identical interval.
The corporate’s public picture has additionally taken a success.
As soon as ranked among the many prime 10 most admired US manufacturers, Tesla has plummeted to ninety fifth within the Axios Harris Ballot’s newest rating, trailing six different automakers.
Buyers attribute the drop partly to Musk’s political exercise, together with an almost $300 million donation to pro-Trump efforts and a controversial endorsement of Germany’s far-right AfD get together.
The letter was signed by shareholders controlling a mixed 7.9 million Tesla shares, together with the SOC Funding Group, the American Federation of Academics, Oregon State Treasurer Elizabeth Steiner and New York Metropolis Comptroller Brad Lander.
They criticized Tesla’s board as “unwilling to act in the best interest of all Tesla shareholders” and argued that Musk’s “full-time attention” is important for turning the corporate round.
“Tesla is facing a crisis,” the letter says bluntly.
The timing of the letter coincides with ongoing tensions between Musk and Tesla’s board over govt compensation.
In January, a Delaware choose struck down Musk’s 2018 pay package deal — as soon as valued at $56 billion — ruling that the board misled traders and that Musk successfully managed the corporate.
Musk has since demanded a brand new association that might grant him 25% voting management.
This month, Tesla introduced that Jack Hartung, the previous CFO of Chipotle, would be part of its board.
However traders famous that Hartung beforehand served with Musk’s brother Kimbal Musk, a Tesla director, elevating issues about board independence.
Musk, for his half, stated this week that he plans to “focus more” on his companies, which additionally embody rocket maker SpaceX and synthetic intelligence startup xAI.
The Publish has sought remark from Musk and Tesla.
