As Tesla's sales continue to slump, is it time for Elon Musk to step aside?

Independent

18 hours ago

Tesla is starting to look like an EV which has run out of charge in the middle of a motorway. Help! Call the AA!
Elon Musk's electric vehicle maker has reported its fifth consecutive monthly decline in sales across Europe, per ACEA, the European Automobile Manufacturers Association.
This comes at a time when the trade body's figures show EVs are on the charge (sorry, couldn't resist the pun) across the EU, with new registrations rising by more than a quarter (26.1 per cent) year to date and a still robust 25 per cent in May. Including the UK and other non-EU nations, Europe-wide sales of battery-powered vehicles rose by 27.2 per cent in May and 27.8 per cent year to date.
By contrast, Tesla's sales have been zapped. Year to date, new EU registrations fell by 45.2 per cent over five months and by 40.5 per cent in May. Europe-wide, those figures were 37.1 per cent and 27.9 per cent respectively. Slumping sales in a rising market? Not a good look.
I once wrote that Elon Musk's baby was the Audi, BMW or Mercedes of the EV world. The status car. The 'Look at me, I have a Tesla' symbol for people with money. How times change. Yes, yes, we've heard about the need to freshen up Tesla's dated models and the cheapie rivals coming out of China, which pose a very real threat. But the high-profile CEO's divisiveness has also poured toxic sludge over the Tesla logo. There have even been incidents of Teslas being vandalised. That is contemptible. Angry about what he's said and done? Far better to hit him in the pocket, which is what more sensible Europeans appear to be doing by abandoning the brand in droves.
Even the UK has started to slip, despite the regard that fleet managers have for the company. Year to date, sales fell by 7.8 per cent here, but they tanked in May (36 per cent decline).
Can the slide be arrested? Musk's checking out of the Trump administration was a good first step. But if I were Musk's strategic comms advisor, I'd advise him to hide in his office and to stay off X. I know, I know, probably not going to work. Musk can't help himself. So, how about this: Stay out of politics and content yourself with showing off about SpaceX, that other Musk business. Sure, it has had the odd issue with rockets crashing, but it is still doing stuff that makes sci-fi nerds like me drool despite ourselves. Perhaps throw in a bit of apolitical philanthropy to compensate for the USAID cuts and dodgy salutes? Lots of billionaires like to make a fuss about 'giving back'. Just a thought.
But what if the slippage continues? Could Musk step down? It seems unthinkable, and I think it highly unlikely. But earlier this year, the Wall Street Journa l, a reliable source on business matters, did report that Tesla board members had been sounding out recruiters about potential successors. The report was swiftly and vehemently denied, but the speculation continues, and there is some logic to it. Musk is a disruptor. It is what drives him, and it has been a feature of his business career. Through building up Tesla from his initial investment in 2004, he disrupted the auto industry, helping to catalyse the progress electric vehicles have made while driving competitors to innovate. But Tesla is now part of the establishment, and for its medium to long-term future, it could arguably use a more conventional CEO. Someone a bit more boring.
Names in the frame? JB Straubel, a Musk confidant who these days runs battery recycling startup Redwood Materials, is often mentioned, and he holds a place on the Tesla board. Internally, right-hand man Omear Ashfar is seen as one to watch, as is Tom Zhu, who's been running things in China. Chief financial officer Vaibhav Taneja is another possibility, although the transition from CFO to CEO doesn't always work so well. At longer odds, but still worth considering, would be Gwynne Shotwell, the president and chief operating officer at SpaceX.
The trouble for any of them would be how deeply intertwined Musk is with Tesla. The shadow he casts over the business is as long as Chile. The group's shareholders have endured a rocky ride of late. At just over $340, the stock is a long way from the $480 peak reached in December, when Trump was preparing to take office and Musk was the presidential BFF. However, if you'd invested this time last year, your $100 would still be worth $184. That's a tasty return.
The shares are propped up by a legion of fanboy investors, including fund managers at big institutions with billions under management. They still expect Musk to wave his magic wand and rediscover Tesla's turbocharged growth. Stranger things have happened. You might dislike the man, but only a fool would underestimate him.
The closest comparator for Musk stepping down might be Steve Jobs leaving Apple. The untimely death of the tech giant's founder led to the elevation of Tim Cook, who has proved himself a successful successor. But the first time he departed, things didn't go so well, and Jobs ended up riding to the rescue..
Needless to say, Tesla is much more dependent on Musk than Apple was on Jobs, even at the height of the latter's power.