A coalition of Tesla shareholders is pressuring the company’s board to require CEO Elon Musk to commit at least 40 hours a week to the automaker, citing concerns that his political focus is hurting Tesla’s performance.
The group, led by the SOC Investment Group and representing about 7.9 million shares, sent a letter Wednesday to board chair Robyn Denholm requesting immediate action. While their stake is a small fraction of Tesla’s 3.22 billion outstanding shares, the request signals growing frustration among investors as the company confronts weakening demand and increased scrutiny.
Tesla reported a 71% drop in quarterly profits and a 13% year-over-year decline in vehicle sales during its most recent earnings call. Shareholders argue Musk’s divided attention — including involvement with federal government projects and other personal ventures — has contributed to Tesla’s recent struggles and reputational damage.
The letter also urges the board to implement a formal CEO succession plan, limit directors’ outside business commitments and add at least one truly independent board member with no ties to existing members. Tesla’s board has faced past criticism for its close relationship with Musk, including from a Delaware judge who in late 2024 struck down the CEO’s $56 billion compensation package, citing weak oversight and board conflicts of interest.
Tesla stock has dropped about 24% since its December 2024 high, though it has recently rebounded following reports that Musk plans to shift his focus back to Tesla and away from Washington politics.
Meanwhile, the company continues to face operational challenges. A redesigned Model Y has failed to boost sales, and the long-promised Full Self-Driving technology remains in limited pilot testing. Tesla plans to launch a small-scale robotaxi program in Austin on June 12, but industry analysts remain skeptical about its near-term impact.
External risks are also mounting, including potential repeals of electric vehicle tax credits and new tariffs on imported parts. Investors warn that without stronger leadership and focus, Tesla may struggle to maintain its position in the increasingly competitive EV market.
Tesla and Denholm have not publicly responded to the shareholder letter.
