Elon Musk‘s multifaceted endeavors have raised concerns among Tesla shareholders and analysts, questioning whether the company’s CEO can effectively manage the electric vehicle giant amidst his myriad responsibilities. Musk’s role in the Trump administration, his efforts to establish a third political party, and his involvement in X, his social media platform, have diverted his attention from Tesla, impacting the company’s performance.
Ross Gerber, CEO of Gerber Kawasaki and an early Tesla investor, emphasizes the need for a full-time CEO to steer the company forward. “To have one of the biggest companies in the world, not have a full-time CEO is unheard of,” Gerber stated. Tesla’s struggles, including plummeting sales and regulatory challenges, necessitate a leader dedicated to addressing these issues. “The fact of the matter is that Tesla is a massive company that needs a lot of attention, and it just isn’t getting it,” Gerber added.
Tesla faces significant challenges, such as decreased profits, historical sales drops, and the loss of regulatory credits. The recent tax and spending bill passed by Congress eliminated a substantial source of revenue for Tesla and removed the $7,500 tax credit for electric vehicle buyers, further diminishing demand. These setbacks have led some Tesla bulls to advocate for constraints on Musk’s activities.
“We believe this is a tipping point in the Tesla story and ultimately the Tesla Board needs to act now and set the ground rules for Musk going forward around his political ambitions and actions,” Dan Ives, tech analyst at Wedbush Securities, wrote in a note to clients. Ives suggested that the board impose rules for Musk’s time allocation at Tesla and establish an oversight committee for his political endeavors.
Despite Musk’s assertions that he will remain Tesla’s CEO for at least five more years, concerns about his leadership persist. Musk has taken over key divisions within Tesla, including sales in Europe and the U.S., following the departure of senior executive Omead Afshar. However, the company’s sales have continued to decline, partly due to Musk’s polarizing political stance.
Gerber expressed frustration with Musk’s leadership, stating, “He doesn’t want to be in the car business anymore.” Musk’s focus on robotaxi services and artificial intelligence may distract from Tesla’s core electric vehicle business, which is facing increased competition and market share loss.
Ultimately, Tesla’s future success hinges on effective leadership and strategic direction. While Musk’s vision and innovation have propelled the company forward, his divided attention and polarizing presence may undermine its potential. As Gerber noted, “He’s not going anywhere,” suggesting that Musk’s position as CEO is secure, at least for the foreseeable future.