Tesla’s board of directors has begun the process of replacing CEO Elon Musk after facing internal and external pressure, according to people familiar with the matter.

The Wall Street Journal (WSJ) reported that the move comes amid falling sales and profits and investors losing patience with billionaire Elon Musk. Tesla’s board of directors has contacted a major recruiting firm to begin the search for a new CEO.

The meetings were held behind the scenes. In one meeting, directors asked Musk to spend more time on Tesla and that he should announce it publicly. Elon did not object. In the first quarter, the electric carmaker’s profits fell by 71%.

Speaking to shareholders during the recent earnings call, Musk said that starting in May, he would allocate more time to Tesla. A few days later, US President Donald Trump thanked Elon during a cabinet meeting. “I guess he wants to go home to his cars,” Trump added.

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Tesla’s board is looking for a new CEO to replace Elon Musk, WSJ reported. Photo: Bloomberg

It’s unclear whether Elon is aware of the search for a new CEO at Tesla. If this becomes a reality, Musk’s two decades of leading Tesla will come to an end. In 2018, he stepped down as chairman but still runs everything at the electric car company.

In addition, the eight-person board wants to add an independent director. JB Straubel – Tesla’s co-founder – has tried to convince major investors that Tesla will not collapse. However, Elon’s turn to politics comes at the worst possible time.

In 2024, Tesla’s car sales fell for the first time in more than 10 years. The company also cut prices on its models, causing profits to fall. The launch of the low-cost Cybertruck pickup truck was a disaster and even became a laughing stock on midnight shows. Tesla sold just 39,000 Cybertrucks between late 2023 and late 2024 in the US, far short of Musk’s target of 250,000 per year.

After Mr. Trump won the US presidential election, Tesla’s market capitalization skyrocketed to $1.5 trillion, but now it’s down to around $900 billion. According to the WSJ, Elon texted someone last year that he was tired of the relentless work pace and didn’t want to be CEO anymore. But he also worried that no one could realize his vision for Tesla: not just a car company but the future of robots and automation. He also complained that despite owning 13% of Tesla, he hasn’t been paid for the past seven years.

Since the 2024 presidential election, Musk has mostly lived in Washington D.C. and spent weekends at Mr. Trump’s Mar-a-Lago estate. He has mostly been communicating with employees remotely. Employees said the first time they saw him in months was at a meeting in March, but also via livestream. One board member said Musk sometimes came unprepared to meetings and needed to be briefed on the state of affairs at Tesla.

Employees initially welcomed Musk’s absence because of his micromanaging style, according to the WSJ. But things quickly changed, especially as Musk grew closer to Trump, a critic of the electric car market who has vowed to revive the oil and gas industry. Some employees wanted confirmation that Elon still believed in Tesla’s mission. Mike Snyder, Tesla’s head of energy, had to reassure employees that Elon still cared about the company.

Tesla is now focusing more on AI and robotics, pivoting away from its old growth model. The humanoid robot Optimus is central to Musk’s ambition to turn Tesla into a $30 trillion company. Its core electric vehicle business is in decline, while its self-driving ride-hailing app is scheduled to launch in June. Customers will be able to book self-driving rides in a Model Y, similar to services like Waymo and Zoox.