A group of major Tesla shareholders is calling on CEO Elon Musk to recommit his attention to the electric vehicle company, citing declining sales, reputational damage and the CEO’s growing list of outside ventures — including a now-concluded stint in the Trump administration.
In a letter sent Wednesday to Tesla board chair Robyn Denholm, the investors urged the board to require Musk to spend a minimum of 40 hours per week at the company and to adopt new governance policies that would limit directors’ external commitments.
They also called for a formal CEO succession plan and at least one new independent board member with no personal ties to Musk or his allies.
“Tesla’s stock price volatility, declining sales, as well as disconcerting reports regarding the company’s human rights practices, and a plummeting global reputation are cause for serious concern,” the letter states. The letter’s contents were reported by CNBC.
“Moreover, many issues are linked to Mr. Musk’s actions outside of his role as Technoking and Chief Executive Officer at Tesla, including his high-profile role as an architect of the US Department of Government Efficiency (DOGE).”
Musk’s time at DOGE — a federal agency he helped lead as part of the Trump administration’s second term — officially ended this week, as his 130-day limit as a special government employee expired.
“The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government,” Musk wrote on social media Wednesday, adding in a separate post: “Thank you President Trump for the opportunity to reduce wasteful spending.”
But for some Tesla investors, his government work is emblematic of a deeper problem: a CEO increasingly distracted from the company’s core mission at a time when it faces mounting headwinds.
Tesla’s sales have slumped, with European deliveries in April down nearly 50% from the same month last year. First-quarter global EV sales also declined year-over-year, and the company’s stock has fallen 12% in 2024 — sharply underperforming the Nasdaq, which is down about 1% over the same period.
The company’s public image has also taken a hit.
Once ranked among the top 10 most admired US brands, Tesla has plummeted to 95th in the Axios Harris Poll’s latest ranking, trailing six other automakers.
Investors attribute the drop in part to Musk’s political activity, including a nearly $300 million donation to pro-Trump efforts and a controversial endorsement of Germany’s far-right AfD party.
The letter was signed by shareholders controlling a combined 7.9 million Tesla shares, including the SOC Investment Group, the American Federation of Teachers, Oregon State Treasurer Elizabeth Steiner and New York City Comptroller Brad Lander.
They criticized Tesla’s board as “unwilling to act in the best interest of all Tesla shareholders” and argued that Musk’s “full-time attention” is essential for turning the company around.
“Tesla is facing a crisis,” the letter says bluntly.
The timing of the letter coincides with ongoing tensions between Musk and Tesla’s board over executive compensation.
In January, a Delaware judge struck down Musk’s 2018 pay package — once valued at $56 billion — ruling that the board misled investors and that Musk effectively controlled the company.
Musk has since demanded a new arrangement that would grant him 25% voting control.
This month, Tesla announced that Jack Hartung, the former CFO of Chipotle, would join its board.
But investors noted that Hartung previously served with Musk’s brother Kimbal Musk, a Tesla director, raising concerns about board independence.
Musk, for his part, said this week that he plans to “focus more” on his businesses, which also include rocket maker SpaceX and artificial intelligence startup xAI.
The Post has sought comment from Musk and Tesla.
