Tesla claims its board is ‘highly confident’ Elon Musk can still grow the company despite its historically weak Q1 earnings. The statement followed a Wall Street Journal report stating that directors had initiated an executive search to replace the CEO. In the past few months, Musk has been spending more time at the White House than at Tesla.

Expressing its confidence in Elon Musk, Tesla denied it was seeking to oust its embattled CEO amid a plunge in sales and profits, calling a media report “absolutely false.”

Hours earlier the Wall Street Journal claimed the company’s board of directors had initiated a recruitment process roughly a month ago, coinciding with the end of what would prove to be a historically weak first quarter. The paper cited unnamed sources.

Last week Tesla suspended its full-year guidance after revealing net profit collapsed 71% in Q1 as demand for its EVs slumped and its operating margin fell to the lowest level in nearly six years. On Wednesday, the company warned in a regulatory filing it had not yet set a date for its annual shareholder meeting and would be late filing its 2025 proxy statement, without stating a reason.

“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,” the company said via X, the social media platform Musk owns and operates. “This [story] is absolutely false (and this was communicated to the media before the report was published).”

Earlier today, there was a media report erroneously claiming that the Tesla Board had contacted recruitment firms to initiate a CEO search at the company.

This is absolutely false (and this was communicated to the media before the report was published).

The CEO of Tesla is…
— Tesla (@Tesla) May 1, 2025

The post sourced the comment to board chair Robyn Denholm, though there is no way of independently verifying that, and her own personal account on X did not confirm the statement. Neither she nor Tesla responded to a request from Fortune for further information.

But in the Wednesday filing, Tesla said its board “has established a Special Committee to consider certain compensation matters involving Mr. Musk.” While it did not say when exactly this occurred, it would seem to confirm the CEO—who received precisely zero compensation for serving as officer or director last year—is not on his way out.

“This story will clearly create a ton of noise tomorrow, but we believe Musk is back in the driver’s seat at Tesla,” wrote Wedbush tech analyst Dan Ives. While the investment banker said any risk of a search is in the rearview mirror following Musk’s pledge last week to spend more time at Tesla, “it shows just how tense the situation got between the Board and Musk.”

Musk claims, ‘We don’t see any reduction in demand’ as Tesla’s Q1 car sales fell 13%

In its report, the Wall Street Journal conceded it could not ascertain the current status of the succession plan in the month that transpired since the alleged executive search. Furthermore, it was unable to determine if Musk was aware of these discussions and whether his promise to dial back his commitments at the White House was made reluctantly or of his own volition.

Speaking to investors last week, Musk played down the danger to Tesla stemming from his political activism, saying the brand’s current crisis was nothing remotely like the numerous times when the company found itself at death’s door in years past.

While his hastily arranged all-hands meeting in late March indicated he was at least aware of the boycott targeting Tesla, he argued it wasn’t having any effect. “Absent the macro issues, we don’t see any reduction in demand,” he said, despite Q1 vehicle sales tumbling 13% to their lowest level since the second quarter of 2022.

Musk is considered by many Tesla shareholders to be a talismanic CEO whose vision, drive, and leadership turned the company into the stock market juggernaut it is today. Without the 53-year-old at the helm, many believe it would be a fraction of the $900 billion it’s currently worth.

MUSK: "A tremendous amount has been accomplished in the first 100 days…This could be the greatest administration since the founding of the country."pic.twitter.com/FvaprzEd4U
— Breaking911 (@Breaking911) April 30, 2025

But his constant attacks on the judiciary and legislative branches for attempting to rein in Trump’s executive powers are triggering a backlash. Musk’s enthusiastic support for Germany’s far-right nationalist party, under state surveillance as a threat to its democracy, also prompted one fund manager to recently acknowledge his Jewish clients demanded he sell their Tesla stock.

After spending a quarter billion dollars of his own money to install Trump in the White House, Musk is sticking to his guns. The very day that official statistics showed the U.S. economy under Trump shrank in the first quarter, Musk effusively praised the president at a televised cabinet meeting.

“I think this could be the greatest administration since the founding of the country,” Musk said.

Tesla backs Elon Musk, calling an alleged plan to oust its embattled CEO ‘absolutely false’