Tesla stock is tanking. Could shareholders fire Elon Musk?

It’s not a great time to be a Tesla shareholder. While the stock was up 2.5% in midday trading on Tuesday, July 8, it remains down for the month and has lost nearly 25% of its value over the past six months.

In most companies, such a performance would have senior executives tugging at their collars and glancing nervously over their shoulders. But Elon Musk, Tesla’s CEO, isn’t showing any signs of concern, at least not publicly.

Despite being the world’s richest man, Musk is not untouchable at Tesla. He is the largest shareholder, with a 12.75% stake, but that doesn’t grant him voting control. (Compare that to Mark Zuckerberg, who owns 13% of Meta’s stock but holds 50% of the total voting power due to a dual-class share structure.)

In theory, if shareholder and board patience wore thin, Musk could be ousted. Whether that would ever actually happen is another matter entirely.

For now, Musk’s position appears secure, but investor patience is certainly being tested. On Tesla’s April earnings call, Musk promised to dedicate more time to the company after spending much of the first quarter engaged in political matters in Washington, D.C. However, his recent launch of the America Party and ongoing battles with President Trump have further agitated shareholders. (Tesla did not respond to Fast Company’s request for comment.)

Longtime Tesla bull and Wedbush analyst Dan Ives delivered an unusually sharp critique of the company on July 8, warning that Musk’s political distractions could cost Tesla up to $1 trillion in autonomous vehicle sales.

“We believe the board now has to take the bull by the horns,” Ives wrote in a note to investors.

He outlined three recommendations for the board:

• Assemble a new pay package for Musk that would give him 25% voting control, paving the way for a potential merger between Tesla and xAI.
• Include in that package a clear expectation for how much time Musk must spend at Tesla.
• Set limits on Musk’s involvement in political matters. “Some general guardrails on this front would help everyone involved, including institutional investors, retail investors, Musk himself, the Board, and Tesla employees around the world,” Ives wrote.

Musk responded on X to Ives’s note on Tuesday, writing simply: “Shut up, Dan.”

Ives isn’t the only analyst raising concerns. On the same day as Ives’s post, Morgan Stanley cautioned that “investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to [Tesla] shares.”

Whether Tesla’s board will act is unclear. It has faced long-standing criticism for being too closely aligned with Musk. Critics point to the $56 billion pay package approved in 2018 and the board’s lack of action in response to Musk’s controversial behavior online and elsewhere. Musk’s personal ties to the board—which includes his brother, Kimbal Musk, and Airbnb cofounder Joe Gebbia—have further fueled these concerns.

There’s also the question of whether the board could act independently without near-unanimous shareholder support. A lawsuit in Delaware Chancery Court over Musk’s pay package revealed that Tesla requires a supermajority—two-thirds of shareholders—to make significant changes at the company.

That said, the idea of replacing Musk has at least been explored. In May, The Wall Street Journal reported that Tesla’s board had contacted executive search firms to initiate a formal CEO search process. Tesla denied the report, stating on X: “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,” according to Tesla chair Robyn Denholm.

Regardless of whether that report was accurate, investors have reason to be uneasy. The company’s market cap has fallen from $1.5 trillion in December to $945 billion, and Musk’s attention continues to be divided.

“The biggest asset for Tesla is Musk . . . and they have never needed him more than today,” Ives said on CNBC on Tuesday afternoon. “They need to show, from an investor perspective, that there is a pilot on the plane.”

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