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Tesla (TSLA, Financials) is going through one of the roughest patches in its history falling profits, sharp stock declines, and growing doubts about Elon Musk's focus. But after days of speculation, the board says it's sticking with Musk, who now promises to give Tesla more of his time.
Tesla's first-quarter profit plunged 71%, the steepest drop the company has ever seen. Shares were down 45% this year before a slight rebound.
Reports surfaced this week that Tesla's board had started looking for Musk's replacement. But Chair Robyn Denholm publicly rejected that story, calling it absolutely false. Musk, meanwhile, posted on X that the article was a deliberately false hit job and said he plans to step back from his government work with the Trump administration's Department of Government Efficiency to re-engage at Tesla.
On a call with investors, Musk admitted his attention had been divided. There's been some blowback for the time that I've been spending in government, he said. Starting in May, he promised, Tesla will once again be his top priority.
This isn't just about leadership. Tesla's brand is taking real damage. Protests outside showrooms have become common, and longtime fans are turning away some citing Musk's politics, others frustrated by delays and price changes. Even Tesla's strong position in China is under threat from ongoing trade tensions.
That said, recent executive orders could help ease tariff pressures, giving Tesla a slight edge over rivals that rely more heavily on imports.
The next few months will show whether Musk's renewed attention is enough to steady Tesla or if deeper issues are setting in.
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This article first appeared on GuruFocus.