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Investor Coalition Pushes for Musk’s Commitment to Tesla

A powerful coalition of institutional investors managing long-term stakes in Tesla is demanding that CEO Elon Musk dedicate at least 40 hours per week exclusively to the electric vehicle giant, citing what they describe as an escalating “crisis” within the company.

In a sharply worded letter addressed to Tesla board chair Robyn Denholm, the investors, who collectively hold nearly 8 million shares, criticized Musk’s increasing absence from the company’s day-to-day leadership and warned of “severe risks to shareholder value” if the board fails to act.

Concerns: Stock Performance, Sales Drop, and Reputation Decline

The letter outlines a series of urgent concerns:

• Tesla’s stock is down 12% year-to-date, significantly underperforming the Nasdaq Composite, which has fallen just 1%.
• Electric vehicle sales plunged 20% in Q1 2025 compared to the same quarter last year.
• In April 2025, Tesla’s monthly sales in Europe dropped by over 48% year-on-year, according to data from the European Automobile Manufacturers' Association.
• Once ranked #8 in the Axios Harris Poll of America’s most reputable companies, Tesla has plummeted to #95, trailing six other automakers.

The investors blame this decline on Musk’s increasing focus on external ventures and political activities, as well as a lack of accountability from Tesla’s board.

External Distractions: Politics, DOGE, and Side Ventures

The letter highlights Musk’s expanding commitments outside of Tesla, including:

• His leadership of xAI, an artificial intelligence venture.
• His continued role at SpaceX.
• His prominent position as “Architect” of the Trump administration’s Department of Government Efficiency (DOGE), where he has advocated for significant cuts to federal agencies.
• Political activities, such as endorsing Germany’s far-right AfD party ahead of this year’s elections and donating nearly $300 million to efforts supporting Donald Trump’s re-election bid.

The investors assert these pursuits have not only distracted Musk from his duties at Tesla but have also damaged the company’s brand and international standing.

Call for Reforms: Governance, Compensation, and Board Oversight

The signatories are urging Tesla’s board to implement a series of reforms:

1. Mandatory 40-hour workweek for Musk at Tesla as a condition for any future compensation packages.
2. A formal CEO succession plan to ensure operational stability.
3. A board-level policy limiting external board memberships for Tesla directors to prevent conflicts of interest.
4. The addition of at least one truly independent director with no prior personal or professional ties to current board members.

The letter criticized Tesla’s recent appointment of Jack Hartung, former CFO of Chipotle, citing his past collaboration with Kimbal Musk, Elon’s brother and current Tesla board member, as an example of the board’s insular structure.

Compensation Controversy: $56 Billion Pay Package Rescinded

This isn’t the first time Musk’s commitment has come under scrutiny. In January 2024, the Delaware Court of Chancery ordered Tesla to rescind Musk’s controversial 2018 compensation plan, which had been worth up to $56 billion. The court found that Musk exerted outsized control over the board and that shareholders were misled prior to voting on the package.

Despite the ruling, Musk is now seeking a new pay package that would give him 25% voting control over Tesla—raising fresh concerns about governance and power consolidation.

Who’s Behind the Push?

The letter was signed by major institutional stakeholders including:

• SOC Investment Group, which advocates for labor rights and corporate accountability
• American Federation of Teachers
• New York City Comptroller Brad Lander
• Oregon State Treasurer Elizabeth Steiner

Together, they’re calling for Tesla to return to its core mission by demanding that Musk show up — consistently and fully.

Tesla’s Response

Tesla has yet to issue a formal response to the investors’ letter. The company has remained largely silent on whether it plans to adopt any of the proposed reforms.

Meanwhile, Musk recently stated that he plans to “increase focus” on his various ventures, but did not explicitly commit to spending more time at Tesla.

A Turning Point for Tesla?

This moment could prove pivotal for Tesla’s future. With EV market share slipping, investor trust eroding, and leadership distractions mounting, the calls for change are growing louder. Whether the board acts decisively—or continues its hands-off approach—may determine whether Tesla regains its footing or continues to lose ground in an increasingly competitive electric vehicle market.

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