Tesla's board narrowed its focus to a major search firm after initially contacting several executive recruitment companies in March 202512. The search process began amid mounting tensions at the company, with profits declining approximately 70% and investor concerns about Musk's government activities taking precedence over his Tesla responsibilities13. This marks the first significant move by Tesla's board against Musk's leadership after years of unwavering support, including approving his $55 billion compensation package and remaining silent during various controversies2.

The board also took additional governance steps alongside the CEO search:

• Board members, including co-founder JB Straubel, have been meeting with major investors to provide reassurance about the company's leadership4

• Directors are looking to add an independent board member to strengthen oversight25

• The board directly confronted Musk about his divided attention, requesting he publicly commit to spending more time at Tesla23

Elon Musk announced on April 22, 2025, during Tesla's Q1 earnings call that he would "significantly" reduce his time allocation to the Department of Government Efficiency (DOGE) starting in May, shifting his focus back to Tesla.1 This announcement came after mounting pressure from investors concerned about Musk's divided attention affecting Tesla's performance. Musk stated he would limit his government work to just "one or two days per week" while maintaining that fighting "waste and fraud" remained "critical work."1

The market responded positively to this news, with Tesla's stock price climbing 20% since the announcement.2 The company had been facing challenges directly linked to Musk's DOGE involvement, including boycotts, protests, and disappointing sales figures both domestically and internationally.2 Prominent Tesla investor Ross Gerber had previously issued a "code red" warning about the situation, highlighting concerns about the potential negative impact on Tesla's reputation and financial stability.3 Despite scaling back his DOGE commitments, Musk indicated he would likely remain with the government efficiency team until the end of Trump's term, though in a significantly reduced capacity.1

Tesla's stock has plummeted approximately 50% since December 20241, with a 36% drop in Q1 2025 alone2, as investors react to Musk's political activities and the company's first annual sales decline in over a decade3. The consumer backlash has manifested in organized "Tesla takedown" protests across the United States, with demonstrators vandalizing Tesla showrooms, setting vehicles on fire, and damaging charging stations4. Some Tesla owners report being reluctant to drive their cars in public, with one Massachusetts owner finding their vehicle vandalized in a church parking lot5.

Institutional investors have also voiced concerns, with several state treasurers and pension funds taking action. New York City Comptroller Brad Lander noted that Tesla's stock losses cost the city's pension systems over $300 million6, while Danish pension fund AkademikerPension announced plans to divest its Tesla shares if major changes weren't made6. Despite this negative sentiment, some individual investors see opportunity in the decline-AJ Bell's platform data shows that for every seller of Tesla shares in April 2025, there were 3.2 buyers, up from 2.5 the previous month1.