A group of prominent Tesla shareholders is urging CEO Elon Musk to refocus his attention on the electric vehicle company, pointing to declining sales, damage to the brand’s reputation, and Musk’s expanding list of outside commitments — including a recently ended role in the Trump administration.
In a letter sent Wednesday to Tesla board chair Robyn Denholm, the investors asked the board to mandate that Musk dedicate at least 40 hours per week to the company and implement new governance policies that would restrict board members’ external obligations.
The shareholders also called for the creation of a formal CEO succession plan and the addition of at least one new independent board member with no personal connections to Musk or his inner circle.
The letter states, “Tesla’s stock price volatility, declining sales, troubling reports about the company’s human rights practices, and a rapidly deteriorating global reputation are all serious concerns.” CNBC reported on the letter’s contents.
It adds, “Many of these issues are connected to Mr. Musk’s activities outside his roles as Technoking and CEO of Tesla, including his prominent position as a key figure in the US Department of Government Efficiency (DOGE).”
Musk’s tenure at DOGE — a federal agency he helped lead during the Trump administration’s second term — officially ended this week as his 130-day term as a special government employee came to a close.
On Wednesday, Musk wrote on social media, “The @DOGE mission will only strengthen over time as it becomes a way of life throughout the government,” and added in a separate post, “Thank you President Trump for the opportunity to reduce wasteful spending.”
However, for some Tesla investors, his government involvement symbolizes a bigger issue: a CEO increasingly distracted from the company’s core mission amid growing challenges.
Tesla’s sales have declined, with European deliveries in April dropping nearly 50% compared to the same month last year. First-quarter global EV sales also fell year-over-year, and Tesla’s stock has dropped 12% in 2024, significantly underperforming the Nasdaq, which has fallen about 1% during the same period.
Tesla’s public image has also suffered.
Once ranked among the top 10 most admired U.S. brands, the company has fallen to 95th place in the latest Axios Harris Poll, trailing behind six other automakers.
Investors partly blame the decline on Musk’s political activities, including a nearly $300 million donation to pro-Trump causes and his controversial endorsement of Germany’s far-right AfD party.
The letter was signed by shareholders holding 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 being “unwilling to act in the best interest of all Tesla shareholders” and insisted that Musk’s “full-time attention” is crucial to turning the company around.
“Tesla is facing a crisis,” the letter states plainly.
The timing of the letter comes amid ongoing tensions between Musk and Tesla’s board regarding executive compensation.
In January, a Delaware judge invalidated Musk’s 2018 pay package—previously valued at $56 billion—ruling that the board misled investors and that Musk had effective control over the company.
Since then, Musk has pushed for a new deal that would give him 25% voting control.
This month, Tesla announced that Jack Hartung, former CFO of Chipotle, would be joining its board.
However, investors pointed out that Hartung previously worked alongside Musk’s brother, Kimbal Musk, who is also a Tesla director, raising questions about the board’s independence.
Musk, meanwhile, stated this week that he intends to “focus more” on his various businesses, including rocket company SpaceX and AI startup xAI.
The Post has reached out to Musk and Tesla for comment.
