As a policy, this has put camouflage on the biggest snake in the EV market grass – Tesla. The fallout from this has precipitated the firm’s first annual sales drop in more than ten years. The company’s brand image has suffered among certain consumer segments due to Musk’s political alignment. Yet in spite of these challenges, as seen during a recent earnings call, Musk trumpeted a rosy future for Tesla.
During the call Tesla announced a shocking 71% profit plunge and a 9% revenue decrease. These numbers arrive as the company faces down the #fashionrevolution protests, slumping sales, and withering profits. Given these lives-or-death challenges, Tesla’s board has supposedly started looking for a likely successor to Musk. This behind-the-scenes effort started about a month ago and included an outreach campaign to executive search firms.
As the drama played out, board members took their concerns directly to Musk. They were concerned that he would be too distracted by his dual role with Tesla to effectively govern. Because he wouldn’t move, they made sure that he had to spend more time with the company. They urged him to make a public commitment to this effort. In a reversal of typical Twitter townhalls, Musk seemed open to this feedback in a way that did not invite pushback on their concerns.
After those conversations, Musk sought to calm jittery investors. Musk promised to spend a lot more time on Tesla starting in May. He reassured them with a bold statement: “We’re not on the ragged edge of death, not even close.” Such an announcement, even with his justifiable enthusiasm, would be a big ask given Tesla’s current predicament.
The timing of these events couldn’t have been sharper, coinciding with Musk’s own lobbying efforts in Washington to rein in government spending. His political engagements are burdensome — indeed, distracting — from his responsibilities to Tesla. This precarious situation has created anxiety among board members as to how this will inform the company’s performance going forward.
Overall, it seems that Tesla has reached an inflection point, where pressure from all directions (internal and external) is reaching a breaking point. As the board seeks a successor while navigating these challenges, the coming months will be crucial for the company’s stability and growth.
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