Latest / Elon Musk Podcast / Why is Tesla looking for new CEO?

Transcript

Why is Tesla looking for new CEO? · Elon Musk Podcast

• 0:01
  Hey everyone, welcome back to the Elon Musk Podcast.
• 0:05
  I'm thrilled to share some exciting news with you Over the
• 0:08
  next two weeks, we're evolving. We'll be broadening our focus to
• 0:11
  cover all the tech Titans shaping our world.
• 0:15
  You'll still get the latest insights on Elon Musk, plus so
• 0:19
  much more. So stay tuned for our official
• 0:22
  relaunch coming soon. Now let's get into this episode.
• 0:26
  Tesla's stock price fell nearly 25% in the first four months of
• 0:30
  2025, though investors watching the slide wonder whether the
• 0:34
  company has a plan if it's CEO Elon Musk leaves or if he stays
• 0:38
  and keeps doing damage. Last Wednesday, the Wall Street
• 0:41
  Journal reported the Tesla's board had reached out to
• 0:44
  multiple executive search firms to start building a short list
• 0:48
  of potential successors. And, according to the story, at
• 0:52
  least some Tesla directors. We're exploring how to replace
• 0:56
  Elon Musk. And that revelation lit a match
• 1:00
  under a question that's been quietly simmering for years.
• 1:03
  What is Tesla without Elon Musk now?
• 1:07
  The report created immediate tension inside Tesla's
• 1:10
  leadership. Hours after publication, Tesla
• 1:13
  board chair Robin Dunham posted a denial on X.
• 1:17
  She said the Journal was erroneously claiming the Tesla's
• 1:21
  board had contacted recruiters for ACEO search.
• 1:25
  They said this is absolutely false.
• 1:27
  Dental added that this clarification had been sent to
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  the press before the story even ran, but her statement left room
• 1:34
  for interpretation. She denied action from the Tesla
• 1:38
  board, but not that any individual directors may have
• 1:41
  reached out on their own. Now, this ambiguity fuels an
• 1:47
  already pressing concern. If Tesla's leadership hasn't
• 1:50
  begun considering what life looks like after Musk, they're
• 1:54
  running blind into a critical future.
• 1:58
  Elon Musk is both Tesla's greatest asset and its most
• 2:02
  unpredictable liability. The stock's performance is still
• 2:06
  buoying, but his presence is known.
• 2:09
  But increasingly, his personal behaviour is dragging the
• 2:12
  company into vital territory. Now Musk has shifted from tech
• 2:17
  mogul to political combatant. He'd become a loud voice for far
• 2:21
  right causes, openly supporting Donald Trump, publicly
• 2:25
  criticizing the federal government, and antagonizing
• 2:28
  Democratic officials. The shift has turned off many of
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  Tesla's most likely buyers, liberal climate focused
• 2:34
  consumers who prefer clean energy and efficient transport,
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  to libertarian rhetoric. Now these political stunts have
• 2:42
  cost Tesla more than just goodwill, though.
• 2:45
  They've hit the bottom line. Car sales are slowing, investors
• 2:49
  are getting nervous, and the people more responsible for
• 2:52
  maintaining faith in Tesla's brand is too often making
• 2:55
  headlines for everything but the business.
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  And at a time when the EV market is tightening and competition is
• 3:01
  getting tougher and all the tariffs that are happening,
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  Tesla is still trading in a stock valuation wildly out of
• 3:09
  sync with its actual sales performance.
• 3:11
  And the core problem for Tesla's board is that Elon Musk is the
• 3:15
  reason the company stock trades at levels other automakers could
• 3:18
  only dream of. Now, as of this week, Tesla's
• 3:21
  price to earnings ratio hovers around 167.
• 3:24
  That's more than 20 times what General Motors trades at.
• 3:28
  Now, Musk has managed to sell the idea that Tesla isn't just a
• 3:31
  car maker, it's an avatar for the future.
• 3:35
  The illusion keeps the stock inflated.
• 3:36
  And that illusion depends entirely on Musk continuing to
• 3:40
  project division people believe in.
• 3:43
  It's not new, though. Four years ago, a Business
• 3:45
  School professor described Tesla to us as the mother of all meme
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  stocks. The stock's performance has
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  always relied more on Musk's cult of personality than the
• 3:55
  company's fundamentals. Tesla often behaves more like a
• 3:59
  social media phenomenon than a stable manufacturing business.
• 4:03
  And retail investors treat Musk like a profit, not just ACEO.
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  As long as he stays loud and provocative, a portion of the
• 4:10
  market stays loyal. But that loyalty has its limits.
• 4:14
  When Musk bought Twitter in 2022 and turned it into a political
• 4:18
  and cultural way to speak his mind, Tesla's shares took a hit.
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  When he launched his Department of Government Efficiency, the
• 4:29
  stock dropped again. Public trust in Musk isn't
• 4:31
  constant at wobbles, depending on how extreme his latest move
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  is. When those wobbles turn into
• 4:36
  sharp downturns, Tesla pays the price, and so do its
• 4:39
  shareholders. The dynamic has created a
• 4:42
  dangerous loop for the board, though.
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  Musk does something outrageous, Tesla suffers.
• 4:47
  But if they push back, the situation could have gave in.
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  Worse, they fire him, the stock would completely crater, and if
• 4:54
  they try to rein him in, he might walk away or retaliate.
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  No one on the board seems eager to challenge the one person who
• 5:01
  makes their company worth what it is.
• 5:03
  And at the same time, Musk's personal behavior raises serious
• 5:06
  questions about his capacity to continue leading the company for
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  some people. His physical health is unclear,
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  he rarely sleep, and he has openly admitted to recreational
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  drug use. He has claimed, without
• 5:17
  evidence, that he is the second most targeted individual for
• 5:21
  assassination after Donald Trump.
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  And at public events, he has appeared distracted or
• 5:26
  disoriented. It's not a stable foundation for
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  a multibillion dollar enterprise.
• 5:31
  Now, Tesla's financials tell one story, but Musk's antics tell
• 5:35
  another. Over the last year, Tesla stock
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  has generally trended upward. That might seem like
• 5:40
  vindication, but the growth masks erratic dips.
• 5:44
  The kind of instability that Musk brings to the brand can't
• 5:46
  be priced in forever. At some point, the market may
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  stop giving him the benefit of the doubt.
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  And that can happen if his political entanglements grow
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  more toxic or if the public gets tired of his acts.
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  That was also the matter of government oversight.
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  When a Trump White House in power, Musk has enjoyed a
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  regulatory leniency. For instance, the administration
• 6:07
  recently rolled back crash reporting requirements for
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  autonomous vehicles, a move that directly benefits Tesla.
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  But it's favorable treatment might not last.
• 6:16
  If Democrats take back the House or win the presidency in 2028,
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  they could just decide to start investigating Tesla safety
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  record or Musk's use of political power for private
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  gain. Now.
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  That possibility alone should be enough for the board to consider
• 6:31
  succession planning. It's not just politics that make
• 6:34
  a transition plan necessary. Eventually, Musk will leave, one
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  way or another. He might get bored, and he might
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  move on and take all of his money with him.
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  And if Tesla doesn't have a plan in place for that moment, I
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  could face a crisis far more damaging than any single stock
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  drop. Now the question, of course, is
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  who could replace Elon Musk? Finding a new CEO isn't just
• 6:58
  about business acumen or leadership skills.
• 7:00
  It's about charisma. It's about who you are and how
• 7:03
  you act. Tesla doesn't need a traditional
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  executive and needs someone who can keep that idea alive,
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  someone who can maintain investor enthusiasm even when
• 7:14
  car sales are flat or when profit margins sink.
• 7:17
  Now this put the board in a difficult situation.
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  Standard executive search firms may not be useful here.
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  Traditional CEO candidates are measured experience and
• 7:26
  discipline. That's not actually what keeps
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  Tesla's stock inflated. The next leader has to be able
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  to generate buzz, to sell belief, to play the markets like
• 7:35
  a showman. They need to be more like a
• 7:37
  YouTube personality than a Fortune 500 veteran.
• 7:41
  The board might be better off looking at figures like Ryan
• 7:44
  Cohen, who led Gamestop's meme stock frenzy, or Adam Aaron of
• 7:49
  AMC who once appeared in a viral video in his underwear to drive
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  up investor morale. Now, as absurd as that sounds,
• 7:56
  it might actually be closer to a Tesla needs to survive in its
• 7:59
  current form. Even social media provocateurs
• 8:02
  like Cat Turd, which is right wing influencer, might make more
• 8:06
  sense in this weird stock market reality than a veteran from
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  Ford. Now that's the real challenge.
• 8:13
  Tesla has created a structure that depends on a person who
• 8:15
  resists structure. Musk's unpredictability is the
• 8:19
  foundation of the company's valuation.
• 8:21
  Planning for his departure is like trying to blueprint a
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  wildfire. That paradox has led the board
• 8:26
  to accommodate nearly every whim he's had over the years.
• 8:30
  They've absorbed the risk because the reward has always
• 8:33
  come. The math might change if Musk
• 8:37
  continues to alienate one side. If the government starts
• 8:40
  scrutinizing and moves, if the market turns on him more
• 8:44
  permanently, the company could be left with no margin for
• 8:47
  error. And without someone ready to
• 8:49
  step in, Tesla may find itself stumbling in the dark.
• 8:54
  Now, Tesla isn't just a company, isn't just Ford or Chevy or
• 8:57
  whatever. It's one of the most visible
• 9:00
  American manufacturers. The past decade help define the
• 9:04
  electric vehicle movement and inspired a wave of competitors.
• 9:08
  Now, if Tesla falters. The effects won't be limited to
• 9:11
  shareholders, though. A weakened Tesla could shift
• 9:14
  public perception of EVs themselves, delaying broader
• 9:18
  adaptation. It also effects workers both at
• 9:21
  Tesla and across its supply chains.
• 9:24
  Thousands of jobs depend on the company's continued success.
• 9:27
  If Musk's behavior starts triggering bigger financial
• 9:30
  shocks, those jobs could disappear.
• 9:32
  Communities that rely on Tesla's factories would feel the blow,
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  and suppliers would lose business.
• 9:38
  Now the damage wouldn't stay contained.
• 9:42
  That's why the board's refusal to be transparent about
• 9:45
  succession planning isn't just a question about corporate drama.
• 9:49
  It's a potential economic risk. Tesla's too large and too
• 9:53
  central to the EV market to be led by someone who refused to
• 9:57
  share the wheel. The board owes it to everyone
• 9:59
  involved to take that seriously and to look around.
• 10:03
  Tesla's future depends on more than one man's charisma, and the
• 10:07
  board has a responsibility to prepare for the day when that
• 10:11
  charisma no longer holds. Hey, thank you so much for
• 10:14
  listening today. I really do appreciate your
• 10:17
  support. If you could take a second and
• 10:18
  hit subscribe or the follow button on whatever podcast
• 10:21
  platform that you're listening on right now, I greatly
• 10:24
  appreciate it. It helps out the show
• 10:25
  tremendously and you'll never miss an episode.
• 10:28
  And each episode is about 10 minutes or less to get you
• 10:32
  caught up quickly. And please, if you want to
• 10:34
  support the show even more, go to patreon.com/stagezero and
• 10:41
  please take care of yourselves and each other and I'll see you
• 10:43
  tomorrow.