Serving as CEO of Twitter, SpaceX, and Tesla has Elon Musk stretched pretty thin, and Tesla investors are not happy about it.
A group of investors that hold $1.5 billion in shares in the EV maker sent a letter to the Tesla board last week, accusing it of “meager oversight” of Musk and his management at Tesla.
“The board has allowed the CEO to be overcommitted at a time when the company faces critical challenges, including increased competition, regulatory scrutiny, and a stock slide,” the investors wrote in an open letter.
Letter signees include 17 groups—such as Amalgamated Bank, United Church Funds, and SOC Investment Group—that tout ethically responsible investments. In their letter, the investors fault Tesla’s board for allowing Musk “to run multiple companies, leading to an inability to address the multiple strategic and competitive issues facing Tesla.”
“Meanwhile, Tesla is increasingly losing market share in the high-performance EV market as legacy automakers launch comparable EV models at similar or lower price points,” the letter says. Other challenges cited include various lawsuits and regulatory probes facing Tesla, along with accusations of poor labor practices.
As a result, investors are urging Tesla’s board to rein Musk in. This could include enacting a policy that limits his "outside commitments or a CEO succession plan.”
However, Amalgamated Bank tells CNN it isn’t necessarily calling for Musk’s ouster. Rather, the larger problem is Tesla’s board failing to maintain independence to oversee Musk’s decisions at the EV maker. “Due to the board’s failure to restrict the CEO’s outside commitments and ensure he is focused on solving the many challenges the company faces, we have lost confidence in its members,” they add.
Tesla did not immediately respond to a request for comment. But it's not the first time Musk has faced accusations of abandoning Tesla. In December, the company's third-largest individual shareholder, KoGuan Leo, also called on Musk to step down from the EV maker to make way for a full-time CEO. Over the past year, value in Tesla's stock has fallen close to 50%.
So far, Musk has publicly said he’s looking to find a new CEO to replace him at Twitter, possibly by year’s end. But he’s also indicated he may get even busier. Last week, Musk said he's trying to develop his own AI chatbot, TruthGPT, to counter the rise of OpenAI’s ChatGPT and Google’s Bard.