Tesla’s board of directors rushed Thursday to defend its director general, Elon Musk, ensuring that he had the confidence of the board of directors in the middle of the increase in investors concerns about his prolonged absences, polarizing policy and sales and plunging profits from the manufacturer of electric vehicles.
The council reacted after a Wall Street Journal Note that he had planned to replace Musk, that the chairman of the board of directors Robyn Denholm denied. Denholm herself has gained heat for its high compensation and the failures perceived to hold Musk responsible towards the shareholders.
The last drama Musc underlines the single dilemma to which Tesla’s board of directors has faced it with managing it as he supervises five other companies and, more recently, focused mainly on the adviser to the American republican president Donald Trump – alienating the politically liberal customers of Tesla. However, the fortune of a company depended more on the personality of its CEO, which even makes the concept of replacing it a huge risk, according to investors, analysts and three people by knowledge of the musc debates between Tesla leaders.
Many analysts have allocated around three quarters of the disproportionate stock market value of Tesla – which far exceeds its current income – to autonomous driving technology and humanoid robots that Musk has promised but has not succeeded for years.
Tesla Bulls considers that Musk as the singular genius that can provide this future despite the intensification of global competition on such technologies, in particular China, where car manufacturers led by Byd have already blowed Tesla in the production of low -cost electric vehicles.
Denholm seemed to address the faithful musk as she refused the Newspaper Report, saying that the board of directors was “very confident” that he could execute “the exciting growth plan to come”.
Growth cannot happen early enough, because the fundamental principles of Tesla automotive activity continue to deteriorate. Its reduction in sales of electric vehicles were particularly clear in Europe, where Musk and Trump policy has proven to be particularly toxic.
The initiates of the company suggested to Musk for years that he replaced in a different way – by hiring a senior executive as a daily manager while Musk continues as a figurehead, two people familiar with the discussions told Reuters. Other musk companies operate in this way, including the manufacturer of SpaceX rockets, where Gwynne Shotwell is president and COO.
Musk has always refused to do the same at Tesla, the two people said.
The board of directors would be confronted with immense difficulties in replacing Musk, said Brian Mulberry, director of the customer portfolio at Zacks Investment Management, an investor of Tesla. The “incredibly complex” challenge requires filling the huge musk shoes and filling the financial chasm that its leadership has left – keeping Tesla electric vehicle activities while providing the “Robotaxi network promised for a long time”.
On a 10 -point difficulty scale, the replacement of Musk would be an “eight or nine” Mulberry, adding that it would require someone with “a person who can enter this and will not always be in the shadow of Elon”.
Gene Munster, director partner at Tesla Investor Deepwater Asset Management, called the replacement of Musk essentially impossible.
“Is Musk bigger than Tesla? The answer is yes,” he said.
The Musk and Tesla board of directors did not respond to the request for comments. Musk needed his detractors at a meeting from the cabinet to the White House on Wednesday, placing two Trump-Fan ball caps on his head, a reading “Gulf of America”.
“They say that I wear a lot of hats,” said Musk, drawing Trump’s laugh. “It’s true.”
Executive outings
Any successor could then have to deal with Musk as a member of the board of directors and the largest shareholder in the company. It currently has a 13%stake.
Tesla’s executive bench has decreased in the past year while Musk has pivoted the company far from its long -standing goal to become a VE giant to focus on robotaxis, robots and artificial intelligence.
Departures included senior leaders who had resisted the evolution of Tesla so strength of her main human car activities, according to three people with discussions between Tesla leaders. Some of them have presented their concerns to the board of directors, which are said with Musk, said people.
Gary Black – Partner Director of the Future Fund, a Tesla investor – wrote on the Musk X platform that the company has no viable internal executives to replace it.
“We do not see anyone inside (Tesla) with the wide range of technical, strategic and execution skills.”
James McCrischie, a private investor of Tesla, said that he doubted members of the board of directors to move against Musk because of his influence on their unusually high appointments and compensation. McCrischie recognized the risks of replacing musk.
“A large part of the course of action is linked to Elon’s love and that robots do everything for us,” he said.
McCrischie compared Musk to the legendary CEO of General Electric Jack Welch, whom investors considered “God”.
“But when he left, it was a card house,” he said. “I think the same is probably true for Tesla. It’s a good business, but it could be a much better business and it is overvalued.”
Mulberry, from Zacks, said Tesla can succeed with or without musk.
“You already have a wide range of electric vehicles, you have Robotaxi and full self-deputy,” he said, referring to Tesla driver technology. “Now, it’s just about managing it to a completion point … Do you really need another wave of Tesla innovation, or do you just need a good execution?”