Speculation continues to grow in the USA that Elon Musk’s days as CEO of Tesla are numbered. The betting company BetIdeas says there is a 44% chance he will be removed this year, a 33% chance that he will quit, and a 64% chance that Tesla’s share price will tumble by another 15% this coming year.
Musk’s increasing involvement with Donald Trump, his flirtations with extreme right-wing parties, and his dabbling in the affairs of other countries and with dubious politicians who are viewed as cranks in their own country is piling on the pressure.
Tesla slump
Protests may have continued to grow outside Tesla showrooms in the UK and Europe and Tesla owners have had their cars vandalised, but the key reason for the near collapse is Tesla’s plummeting share price. It fell by a massive 30% in the month up to 20 March, when it closed at $236.26 on NASDAQ. Auto industry insiders reckon it’s pretty certain that the share price will keep going south.
Tesla has an ageing range of models and faces stiff competition from China – notably BYD, a company Tesla can’t compete with on price or charging speed. As a result, Musk has moved Tesla into becoming a premium brand, charging higher prices. But this cannot be successful while Musk trashes his own brand with his extreme right-wing politics.
He has made other serious errors. Cybertruck has been an expensive flop; Musk sold Tesla on driverless technology, but he is no longer setting the pace and he has not developed a cheaper mass-market electric vehicle like the Chinese have done.
Toxic Trump-Musk brand
The Trump-Musk White House ‘car sales stunt’ in early March looked desperate, with Trump acting as salesman for Tesla, which turned off potential buyers in the USA and Europe followed by comments that “radical left lunatics” were “illegally” boycotting Tesla.
Tesla’s letter to Jamieson Greer, the US Trade Representative (USTR), was revealing. Firstly, it warned the USTR that Trump’s tariffs would harm Tesla. Secondly, nobody signed it – always a bad sign of a company’s culture when nobody dare criticise the boss.
Investors won’t stand back and watch the company continue to sink. It will need a new person to steady the ship, dissociate the company from right-wing politics, and focus on getting a mass-market EV on the road.
As a spokesperson person for BetIdeas told Yorkshire Bylines, “He’s a very controversial individual and his government job is definitely making him an even more divisive figure. We think his time in charge of the company is coming to an end.”
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