A Wall Street Journal (WSJ) report on Wednesday claimed that Tesla’s board of directors had initiated a search for a potential successor to CEO Elon Musk, citing sources familiar with the matter.
But Tesla (NASDAQ:TSLA) chair Robyn Denholm later denied the story, posting on X that the WSJ report was “absolutely false” and adding that the board is “highly confident” in Musk’s ability to “continue executing on the exciting growth plan ahead.”
Musk also said on X that it was a “deliberately false article.”
Before it was denied by Tesla, UBS analyst Joseph Spak offered five initial thoughts on the WSJ report, noting that while it is unclear whether the search is ongoing, the implications could be significant.
1) Spak said that “if the report is true, and if Tesla were to install a new CEO, it would be a watershed moment for the company.” The analyst acknowledged Musk’s vision, leadership, and contribution to the automotive industry.
2) Spak also emphasized that “perhaps no other company has as large a key man risk as TSLA,” and that the report “may re-highlight that risk.” Even if Musk stays on, UBS believes it is important for investors to gain better clarity on succession planning.
3) Musk said during Tesla’s Q1 2025 earnings call that he’ll “be allocating far more of my time to Tesla.”
Spak notes that the report indicated that the board had asked him to spend more time on the company, and suggested that this action could have been taken to address concerns from the board.
4) Even if Musk were no longer CEO, “there is a path for him to remain heavily involved with the company and help guide strategy and vision,” Spak said.
Still, he cautioned that this could “create tension between him and the theoretical new CEO.” Spak also pointed to Musk’s ownership of ~13% of Tesla shares and his publicly stated desire for ~25% voting control in order to feel comfortable helping grow Tesla into a leader in AI and robotics.
5) Spak stresses that Tesla as a company and stock is “at somewhat of a critical juncture.” While its core business remains automotive, which is under growing pressure, the longer-term bull case centers around Tesla as an AI company.
“Finding a CEO who can captivate the market and investors as much as Musk is a tall task, in our view,” the UBS analyst wrote.
UBS concluded the note by highlighting this quote from the WSJ report: “Last spring, he told that person that he no longer wanted to be CEO of Tesla, but that he was worried that no one could replace him atop the company and sell the vision that Tesla isn’t just an automaker, but the future of robotics and automation as well.”
Musk recently said he would significantly reduce his involvement with the Trump administration to focus more on leading Tesla.
His role at the Department of Government Efficiency (DOGE), where he has spearheaded efforts to slash federal jobs, has drawn criticism and added to investor unease amid declining sales of Tesla’s aging EV lineup.
Moreover, the billionaire’s alignment with far-right politics in Europe has sparked protests and incidents of vandalism at Tesla showrooms and charging stations in both the U.S. and Europe.
