Musk, Tesla chair slam report saying its board wants to replace him as CEO

• Musk pledged last week to refocus most of his time on Tesla, saying he would take a significant step back from DOGE.

Driving the news: Tesla's board recently "reached out to several executive search firms to work on a formal process for finding Tesla's next chief executive," WSJ reported.

• The board "narrowed its focus to a major search firm," the paper said, though the status of the search was unknown and it was unclear whether Musk knew about it.
• "Board members told him he needed to spend more time on Tesla" and say so publicly, WSJ reported, citing people familiar with the meeting. Musk reportedly didn't argue with the board.

What they're saying: Tesla chair Robyn Denholm in a statement posted to the firm's X account said the WSJ's Wednesday night report had "erroneously" claimed the board had contacted recruitment firms to initiate a CEO search.

• "This is absolutely false (and this was communicated to the media before the report was published)," Denholm said.
• "The CEO of Tesla is Elon Musk and the Board is highly confident in his ability to continue executing on the exciting growth plan ahead," she added.
• Musk said it's "an EXTREMELY BAD BREACH OF ETHICS" that WSJ "would publish a DELIBERATELY FALSE ARTICLE and fail to include an unequivocal denial beforehand by the Tesla board of directors!"
• A WSJ spokesperson said: "We stand by our reporting. Tesla was given the opportunity to provide a statement before publication, which they did not do."

Between the lines: Wedbush Securities analyst Dan Ives, who had called for Musk to refocus on Tesla, described the board's action as a "warning shot."

• "While this was a very tense situation, we believe Musk clearly did the right thing and we believe Musk will remain CEO for at least five years at Tesla and we would be surprised if the Board was still heading down this search path as of today," Ives wrote late Wednesday in a research note.

Zoom in: The Tesla board and Denholm had previously been largely silent since Musk started becoming more political.

• The board has come under scrutiny over the years from critics who say it hasn't provided adequate oversight of Musk. In March, Ives said the board needed to "step up" and deal with the brand's "crisis."
• Tesla shares have lost about a third of their value since Trump took office and Musk became the face of his administration's efforts to overhaul the government.

• That said, Musk told investors last week that its future is bright. "I encourage people to look beyond the bumps and potholes of the road immediately ahead of us," he said.

Threat level: The public has been souring on Musk in recent months.

• 33% of U.S. adults had a "very or somewhat favorable" opinion about him in an April survey from the Associated Press-NORC Center for Public Affairs Research, compared with 41% in December.
• 65% said he has too much influence on the federal government.

Musk and Denholm did not immediately respond to Axios' requests for comment Wednesday night.

• And Musk eliminated Tesla's public relations team several years ago.
• Ives said the "situation with Musk at DOGE was reaching a breaking point, but we believe that cooler heads have now prevailed and that the Board is now NOT actively looking to replace Musk as CEO and this code red situation is now in the rearview."

💭 Our thought bubble: Even if the board could find a suitable replacement for Musk, loyal investors might revolt — and it's hard to envision Musk relinquishing control, even if he doesn't have the title of CEO.

Rebecca Falconer contributed reporting.

Editor's note: This article was updated with a statement from the Wall Street Journal.