Tesla Board Opened Search for a CEO to Succeed Elon Musk
With profits and stock price sinking, board members told Musk he needed to spend more time at company
About a month ago, with Tesla’s TSLA -3.38%decrease; red down pointing triangle stock sinking and some investors irritated about Elon Musk’s White House focus, Tesla’s board got serious about looking for Musk’s successor.
Board members reached out to several executive search firms to work on a formal process for finding Tesla’s next chief executive, according to people familiar with the discussions.
Tensions had been mounting at the company. Sales and profits were deteriorating rapidly. Musk was spending much of his time in Washington.
Around that time, Tesla’s board met with Musk for an update. Board members told him he needed to spend more time on Tesla, according to people familiar with the meeting. And he needed to say so publicly.
Musk didn’t push back.
Tesla has been on a losing streak in the months since Musk, its visionary chief executive, began spending much of his time helping President Trump slash federal spending. Last week, after the company said its first-quarter profit had plunged 71%, Musk told investors he would soon pivot back to his job at Tesla.
“Starting next month,” he said on a conference call about earnings, “I’ll be allocating far more of my time to Tesla.”
The board narrowed its focus to a major search firm, according to the people familiar with the discussions. The current status of the succession planning couldn’t be determined. It is also unclear if Musk, himself a Tesla board member, was aware of the effort, or if his pledge to spend more time at Tesla has affected succession planning. Musk didn’t respond to requests for comment.
During a cabinet meeting on Wednesday, Trump thanked Musk for his government work. “You know you’re invited to stay as long as you want,” Trump said. “I guess he wants to get back home to his cars.”
Any change at the top would mark a major moment for Tesla: Musk has run the electric-vehicle maker for nearly 20 years, though he stepped aside as board chairman in 2018. Musk has been deeply involved in all of his businesses, even those in which other executives handle day-to-day management.
The eight-person Tesla board has been looking to add an independent director, according to people familiar with the process. Some directors, including Tesla co-founder JB Straubel, have been meeting with major investors to reassure them the company is in good hands.
Musk’s detour into government came at a difficult time for his biggest company. Sales of Tesla’s electric cars fell in 2024, the first annual decline in more than a decade. The company slashed prices, which ate into profit margins. Its high-profile Cybertruck, derided for its strange looks, became the butt of jokes by late-night comics.
Musk’s close ties to Trump tarnished Tesla’s brand for some consumers. Making matters worse, the president’s tariffs have complicated Tesla’s business in China, one of its biggest car markets, and a U.S. supply chain that relies heavily on vendors in Mexico and Canada.
Musk’s proximity to the president proved no help on that front. He told investors last week he would “continue to advocate for lower tariffs rather than higher tariffs, but that’s all I can do.” The decision, he said, was the president’s.
After Trump’s victory last year, Tesla’s shares surged at first, reflecting optimism that Musk’s close ties to the president would yield benefits for his businesses. Tesla’s market value hit a record high of $1.5 trillion in December. Since then, it has fallen to about $900 billion.
Early last year, after some two decades of running Tesla, Musk confided to someone close to him, in late night texts, that he was frustrated to still be working nonstop at the company, especially after a Delaware judge had struck down his multibillion-dollar pay package.
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 has complained both in public and private that despite owning roughly 13% of the company, he has been working without pay for the last seven years. The Tesla board recently formed a special compensation committee to address CEO compensation.
Musk has enormous demands on his time. Tesla is only one of five businesses he oversees. At Tesla alone, more than 20 executives report directly to him, according to an internal document. Since the election, he has spent most of his time in Washington, with weekends at Trump’s Mar-a-Lago resort in Florida. When he met with Tesla employees and board members, he often did so remotely.
Some Tesla employees said that the first time they had heard from Musk in months was at an all-hands meeting in March, streamed to all X users, where he tried to reassure employees and persuade them not to sell their shares.
“If you read the news, it feels like Armageddon,” he told them. “I can’t walk past a TV without seeing a Tesla on fire,” he said, referring to vandalism at Tesla showrooms and charging stations. “There are times when there are rocky moments, a little bit of stormy weather, but I’m here to tell you the future is bright and exciting. What I’m saying is—hang on to your stock.”
Executive focus
Musk spent more than $250 million on Trump’s re-election effort. He took the stage with Trump at rallies and even spent a chunk of time in Pennsylvania after identifying it as a state that Trump couldn’t afford to lose. On election night, he was in the ballroom at Mar-a-Lago.
The next morning, Nov. 6, he flew out of Palm Beach to attend a Tesla board meeting in Austin. Soon, he was back in Mar-a-Lago sitting in on meetings with world leaders and helping to vet candidates for cabinet positions.
Musk was given the job of running the Department of Government Efficiency, which eventually was staffed with government outsiders that included investors and employees from his companies. His status as a “special government employee” enables him to work at the White House for 130 days each year without filing the financial-disclosure forms required for regular employees.
As Musk drew closer to Trump, who has criticized EV mandates and vowed to reinvigorate the oil and gas industries, some employees sought assurances from management that Musk still supported Tesla’s mission to fight climate change and support sustainable-energy infrastructure.
Late last November, Tesla executive Mike Snyder tried to reassure his team that Musk’s political tilt wouldn’t distract him from the business. “It’s obviously been a turbulent and emotional season, I acknowledge that,” he said, according to a recording of the meeting reviewed by The Wall Street Journal. “I’d rather have Elon next to Trump than an enemy of Trump.”
Snyder, whose team works on energy storage and solar power, told his team that Musk continued to answer texts. “People concerned that Elon is not engaged or interested, I can assure you that’s not true,” he said.
By early this year, it was clear to some inside the company that Musk’s political foray was becoming a business liability. Tesla was losing brand appeal in markets such as California and Germany, and drivers had begun putting bumper stickers on their Teslas distancing themselves from Musk’s politics. Tesla also was losing ground in China to homegrown rivals such as BYD.
Eliah Gilfenbaum, a Tesla executive in California, told his team that it was getting more challenging to hire and retain talent, according to one person who was present. He told them Tesla would be better off if Musk resigned. That was unlikely to happen, he told them, and employees needed to reconcile the boss’s politics with the company’s mission. He advised them to try to compartmentalize and just keep going.
After two newspapers reported on Gilfenbaum’s remarks, Gilfenbaum was forced out of Tesla, the person said. Tesla hasn’t commented on the matter.
Growth problem
Tesla executives have said the company is in a transition period. Its popular Model 3 car and Model Y crossover drove a first wave of growth. Now it is pivoting to artificial intelligence and robotics, heralded by new vehicles like its Cybercab, a gold two-seater sedan with no steering wheel or pedals, and by Optimus, a humanoid robot central to Musk’s vision for the company. Musk has posited that robotics could transform Tesla into a $30 trillion company, many times its current valuation.
Meanwhile, though, its core EV business is faltering, and its newest vehicle, the Cybertruck, hasn’t provided much of a boost. Musk pitched the Cybertruck, unveiled in 2019, as a futuristic, bulletproof alternative to old school pickups like Ford’s F150. The first versions to reach customers, in late 2023, were priced around $100,000—2½ times the price Musk first announced.
The truck has faced eight recalls, including on safety hardware such as the accelerator pedal and windshield wipers. In its first full year of sales, Tesla sold just 39,000 Cybertrucks in the U.S., according to Cox Automotive estimates—a fraction of the 250,000 in annual sales Musk said was the goal.
While many investors held out hope that Tesla would release a new, low-cost model to invigorate sales in 2025, the company instead has focused on refreshing its existing lineup and lowering prices by changing out expensive parts like the material used on its seats.
In March, it unveiled a refresh of the Model Y, its bestselling car. In April, Tesla released a less expensive version of the Cybertruck, priced at $69,990.
Musk and his lieutenants have redoubled their efforts to convince investors that Tesla’s long-planned autonomous vehicles are just around the corner. Tesla plans to open up its ride-hailing app to the public by the end of June, enabling customers in Austin, Texas, to take unsupervised robotaxi rides in Model Ys. That would put the company in competition with existing robotaxi services like Alphabet’s Waymo and Amazon’s Zoox.
In February, Tesla’s finance chief Vaibhav Taneja warned some investors that Tesla would have a “rough quarter.”
In recent meetings with investors, board members told them that despite Musk’s government work, he was involved in Tesla meetings remotely. One board member told people that sometimes Musk wasn’t as well prepared and that he needed to be briefed more about what is happening with Tesla. The board members continued to say they believed Musk’s proximity to Trump and the White House would benefit the company over the long term.
Last week’s dismal earnings report showed quarterly revenue had declined 9%, including a 20% drop in automotive revenue after sales fell in important markets such as California, China and Germany.
Musk told investors the blowback against Tesla stemmed from his work with DOGE. “The real reason for the protests, the actual reason, is that is those receiving the waste and fraud wish to continue receiving it,” he said. “That is the real thing that’s going on here, obviously.”
After announcing that he would spend less time in Washington and more time at Tesla, Musk defended the company’s performance and expressed optimism about its future. “We’re not on the ragged edge of death,” he said, “not even close.”
U.S. Army Plans Massive Increase in Its Use of Drones
The shift to more small unmanned aircraft is based on lessons from Ukraine battlefield
Key Points
What's This?
The U.S. Army plans to equip each combat division with around 1,000 drones, drawing from lessons in the Ukraine war.
The Army intends to shed outmoded equipment, and is halting procurement of Humvees.
The overhaul would cost $36 billion over five years, funded by cutting outdated systems, and requires congressional support.
HOHENFELS, Germany—The U.S. Army is embarking on its largest overhaul since the end of the Cold War, with plans to equip each of its combat divisions with around 1,000 drones and to shed outmoded weapons and other equipment.
The plan, the product of more than a year of experimentation at this huge training range in Bavaria and other U.S. bases, draws heavily on lessons from the war in Ukraine, where small unmanned aircraft used in large numbers have transformed the battlefield.
The Army’s 10 active-duty divisions would shift heavily into unmanned aircraft if the plan is carried out, using them for surveillance, to move supplies and to carry out attacks.
To glean the lessons from Ukraine’s war against Russia, U.S. officers have debriefed its military personnel and consulted contractors who have worked with Kyiv’s military about their innovative use of drones.
“We’ve got to learn how to use drones, how to fight with them, how to scale them, produce them, and employ them in our fights so we can see beyond line of sight,” said Col. Donald Neal, the commander of the U.S. 2nd Cavalry Regiment. “We’ve always had drones since I’ve been in the Army, but it has been very few.”
The effort to integrate drones was on full display in February when a brigade from the 10th Mountain Division battled against a mock opponent here. During the Cold War, the huge Hohenfels training range was used to prepare for armored warfare against a potential Soviet attack on Western Europe.
But in an updated scenario reflecting new combat tactics used in Ukraine, small drones buzzed in the gray winter skies controlled by soldiers and defense contractors in the muddy fields below.
The bitter cold caused ice to form on some of the aircraft’s rotor blades and sapped the batteries, a glitch that hadn’t arisen in earlier exercises in Hawaii and Louisiana. Soldiers rushed to recharge them as they sought to keep the unmanned aircraft aloft.
Ukrainian and Russian troops have clashed with artillery, armored vehicles, manned fighters and other conventional systems. But it is drones that have transformed the conflict because they are cheap, can attack in swarms to overwhelm defenses, and can send live video feeds to the rear that can make it difficult to hide on the battlefield, analysts said.
“Land warfare has transitioned to drone warfare. If you can be seen, you can be killed,” said Jack Keane, the retired general who served as vice chief of staff of the Army and observed the exercise here. “A soldier carrying a rocket-propelled grenade, a tank, command and control facilities, artillery position can all be taken out by drones very rapidly.”
Drones are just one capability the Army plans to field as the Army seeks to buttress its ability to deter Russia and China after decades of fighting insurgencies in the Middle East and Central Asia.
The service is also developing ways to better link soldiers on the battlefield, drawing on cellphones, tablets and internet technology, and is acquiring a new infantry squad vehicle. The Army plans to invest about $3 billion to develop better systems for shooting down enemy drones and is moving to build up its electronic warfare capabilities.
Altogether the overhaul would cost $36 billion over the next five years, officials said, which the Army would come up with by cutting some outmoded weapons and retiring other systems—steps that will require congressional support.
The “Army Transformation Initiative,” as the service’s blueprint is known, comes as Elon Musk’s Department of Government Efficiency has been seeking to slash spending and personnel across the government.
Gen. Randy George, the Army chief of staff, and Daniel Driscoll, the secretary of the Army, met with Vice President JD Vance recently to explain that the service had a plan to upgrade its capabilities while making offsetting cuts, a Pentagon official said. Defense Secretary Pete Hegseth endorsed the plan in a directive signed this week.
“We aren’t going to ask for more money,” George said in an interview. “What we want to do is spend the money that we have better.”
The Army is halting procurement of Humvees, its main utility vehicle for decades, and will no longer purchase its Joint Light Tactical Vehicle. It is also stopping procurement of the M10 light tank, which has proven heavier and less useful than planned when the program began a decade ago. It is also planning to retire some older Apache attack helicopters. A reduction in civilian personnel will also contribute to the savings.
Three brigades—the 3,000 to 5,000 soldier formations that make up divisions—have already been outfitted with some of the new unmanned systems, and the goal is to transform the rest of the active-duty force within two years, Driscoll said in an interview. A division typically has three brigades.
Army divisions that haven’t begun to incorporate the new technology typically have about a dozen long-range surveillance drones, which were first deployed more than a decade ago.
The Marines have done away with their tanks as part of a separate overhaul that calls for small missile-toting combat teams to hop from island to island in the Western Pacific to attack the Chinese fleet in a conflict.
The Army plan, which is intended to boost the service’s capabilities in Asia as well as Europe, still envisions acquiring new tanks, long-range missiles, tilt-rotor aircraft and other conventional systems.
The American industrial base will have to increase to produce the latest off-the-shelf technology that the Army wants. Last year, Ukraine built more than two million drones, often with Chinese components, U.S. officials say. But the U.S. military isn’t allowed to use parts from China.
Foreign Jihadists Helped Syria’s Rebels Take Power. Now They’re a Problem.
The U.S. and many Syrians want ideological foreign fighters removed, but the new government is torn
Key Points
- Syria’s new leaders grapple with integrating thousands of foreign fighters who aided in overthrowing Assad’s regime.
- Many Syrians fear these fighters, suspecting their involvement in ethnic killings, complicating the new government’s efforts.
- The U.S. demands guarantees that foreign fighters won’t be part of Syria’s government, as some have been appointed to senior positions.
DAMASCUS—Syria’s new leaders have to figure out what to do with thousands of foreign fighters in their ranks, whom many in the country fear and suspect were involved in a recent wave of ethnic killings.
Up to 10,000 fighters from across the Middle East, Europe and Central Asia lent crucial muscle during the overthrow of the Assad regime and are supporting the nascent government. But their hard-line interpretations of Sunni Islam make them a liability for Syria’s new rulers, who want to distance themselves from their Islamist past and pursue an inclusive government.
Mohammed Zufar, a 20-year-old Uzbek, illustrates the conundrum. He came to Syria through Turkey in October to fight with Katibat al-Ghuraba, an Islamist group composed of fighters from Central Asia. Within weeks, he was on the front lines of the rebel offensive in a coalition led by Syrian rebel group Hayat Tahrir al-Sham.
He relied on Uzbek field commanders who spoke Arabic to convey orders from Syrian rebel leaders during the rapid offensive, he said. With the revolution over, he hopes to join Syria’s new army and help build a country on the precepts of Islamic rule.
“I came here for jihad and will stay even as a martyr,” Zufar said in a mix of Uzbek, Turkish and broken Arabic. He said he doesn’t want to return to face potential oppression in Uzbekistan: “I hope to stay here and settle.”
Zufar said he had participated in what he saw as a holy war. The Islamic rule he hopes to establish in Syria is exactly what many in the religiously and ethnically diverse society of 24 million people want to avoid.
The U.S., which made tough demands for Syria’s government in recent weeks, wants guarantees the foreign fighters won’t remain welcome in the new state.
“The interim authorities need to make sure that foreign terrorist fighters have no role in Syria’s government or military,” Tim Lenderking, a senior Middle East official at the State Department, said April 24.
Spokesmen for Syria’s transitional government didn’t respond to requests for comment.
After seizing Syria’s capital in December, the new rulers appointed foreigners to senior military positions, including men from Jordan, Egypt and Turkey. Ahmed al-Sharaa, Syria’s new president and leader of the victorious Hayat Tahrir al-Sham rebel group, known as HTS, has said foreign fighters who supported the revolution would be rewarded and potentially granted citizenship.
“They have experience in fighting in various countries, operating heavy weaponry, producing propaganda, and they have global networks both to recruit and to raise financing,” said Broderick McDonald, an associate fellow at the International Centre for the Study of Radicalisation, a think tank at King’s College London.
Deadly ambushes on state security forces in March triggered reprisal killings that residents said were conducted by foreign fighters and other forces affiliated with the government.
The attacks occurred in a coastal area home to Syria’s Alawites, a minority group to which the Assad family, which ruled Syria with an iron fist for five decades, belonged. People at the time told The Wall Street Journal that convoys of armed men threatened residents, shot people and burned homes.
The Syrian government established a committee to investigate the attacks. A committee official said in April that dozens of people have been questioned and that the committee is examining more than 50 incidents. Sharaa in April approved a three-month extension of the committee’s work.
Sharaa was affiliated with Islamic State until he signed up with al Qaeda in 2012. He later cut those ties as well and fought against both groups. As president, he has distanced himself from Islamic extremism and said his government will represent all of Syria’s ethnic and religious communities.
Even Syrians critical of foreign fighters acknowledge it would be hard to purge them. While some fighters could drift off to take part in religious conflicts in places such as Africa, there is a risk others could turn against Syria’s leaders if the government abandons Islamist ideals or pushes them to return to countries where they could be repressed.
“It is impossible to deport all of them—there are a lot of political challenges” said Ziad Wannous, a 31-year-old dentist in Damascus who co-founded a democracy advocacy group after the fall of the Assad regime. But if some are to be granted citizenship, it should be done by an established process, not by fiat, he said.
Khalid Qaranful, a 24-year-old Syrian who was part of the rebel offensive, fought alongside foreign fighters who he said helped assure victory. Some foreign fighters have been in Syria for a decade, marrying Syrian women and sending their children to local schools.
“Some of them have opened shops and settled down,” Qaranful said. “And some learned to speak better Arabic than us.”
Abu Mareyah, a fighter from Lebanon, said he took up arms against Hezbollah there, then entered Syria in 2017 to fight the Assad regime and groups such as Hezbollah that were helping to prop it up.
“We as Sunnis felt threatened living under Hezbollah, and our brothers in Syria felt the same under Assad,” he said standing in front of the Umayyad Mosque in Damascus, a rallying point for Sunni Islamist fighters.
Foreign fighters, Abu Mareyah said, deserve recognition.
“Some traveled treacherous routes to arrive in Syria, giving up their lives abroad and spending tens of thousands of dollars to get here,” he said. “We are hoping to get citizenship. We have become part of Syrian society.”
After Hours Summary: Busy earnings session: MSFT +7.8%, META +5%, TTMI +12.9%, ALGN +11% on upside; OLO +12.2% on Bloomberg report it's exploring a potential sale
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: TTMI +12.9%, ALGN +11%, MAX +10.3%, NTGR +9.9%, RSI +9.3%, TNDM +8.4%, MSFT +7.8%, DLX +7.7%, MGY +7.4%, FORM +6.6%, CNMD +5.6%, WEX +5.5%, CHRW +5.3%, AEIS +5%, META +5%, WAY +4.9%, GH +4.8%, SPOK +4.6%, VAL +4.1%, ALKT +4%, MGM +3.9%, MCW +3.4%, MYRG +3%, NYMT +2.9%, CACC +2.6%, TS +2.5%, CGNX +2.2% (also names new CEO), EQIX +2.2%, HLF +1.9%, HOOD +1.9% (also increases buyback program by $500 mln), MTG +1.9%, CTSH +1.7%, HST +1.3%, MEOH +1.3%, UDMY +0.9%, MAA +0.8%, PTC +0.7%, SCI +0.7%, VICI +0.6%, RYI +0.5%, NLY +0.5%, CNXN +0.4% (also increases share repurchase authorization by $50 mln), BE +0.3%, GFL +0.3%, AX +0.2%, WHD +0.2%, AM +0.1%, AWK +0.1%, IRT +0.1%, VTR +0.1%
Companies trading higher in after hours in reaction to news: OLO +12.2% (exploring a potential sale, according to Bloomberg), J +4.8% (approves special dividend of AMTM stock), NVDA +4% (positive AI infrastructure comments from META; also MSFT provided bullish Azure guidance), BKV +3.4% (BKV to develop carbon capture projects at two of CRK's facilities), AMZN +3.2% (investing $4+ bln to expand rural delivery network), WOLF +2.4% (CFO to step down), KREF +1.4% (files for $750 mln mixed securities shelf offering; files for offering by selling shareholders), UAMY +1.2% (completes review of its expansion plans), HII +0.8% (wins US Navy contract modification), VICI +0.6% (files mixed securities shelf offering), NVO +0.6% (NEJM publishes Phase 3 trial of semaglutide), TWI +0.3% (expands production rights for Goodyear brand), GSK +0.2% (reports data on Nucala), POOL +0.1% (increases dividend, increases share buyback authorization to $600 mln), NBHC +0.1% (increases dividend), ATKR +0.1% (increases dividend)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CFLT -10%, PPC -8.2%, AGI -6.9%, GKOS -6.7%, TFSL -6%, QCOM -5.8%, ICLR -4.9%, CTOS -4.6%, AVB -4.1%, GL -4%, CDNA -3.7%, COKE -3.5%, AMCR -3.3%, SNBR -3.2%, OPK -2.9%, CWEN -2.8% (also increases dividend), MKL -2.8%, FTAI -2.4%, MDXG -2.3%, RYN -2.2%, MET -2% (also authorizes new $3 bln share repurchase program; also announces deal with Talcott to reinsure $10 bln), AXS -1.9%, KLAC -1.7% (also increases buyback program by $5 bln, also increases dividend), TDOC -1.7% (also acquires UpLift), CRK -1.5%, MATW -1.4%, CMPR -1.3%, HCC -1.2%, TNC -1.2%, BNL -1.1%, ALB -1%, BHC -0.9%, TROX -0.9%, INVH -0.8%, CP -0.7%, EG -0.7%, SFM -0.6%, CAKE -0.5%, EBAY -0.5% (also names new CFO), ENVX -0.5%, THG -0.5%, AFL -0.3%, AR -0.3%, AIN -0.1%, ALL -0.1%, ASH -0.1%, OTEX -0.1% (also expands Business Optimization Plan)
Companies trading lower in after hours in reaction to news: ESEA -5.9% (to delay 20-F filing), SEI -3.1% (convertible notes offering), CSX -1.6% (secures ratification of new labor deals), CRK -1.5% (BKV to develop carbon capture projects at two of CRK's facilities), ASPI -1% (files for $100 mln mixed securities shelf offering), CTGO -0.1% (provides corporate update)