TLDR
- TSLA closed at $287.21 on May 2, up 2.38%
- Board denies report of replacing CEO Elon Musk
- European sales plunged 37% in Q1, led by Sweden and Netherlands
- Tesla faces rising Chinese competition and political backlash
- Earnings due July 21-25, Model Y refresh aims to revive European sales
Tesla Inc. (NASDAQ: TSLA) closed at $287.21 on May 2, gaining 2.38%, even as the electric vehicle giant faced deepening challenges in Europe and fresh controversy around CEO Elon Musk.
The board rejected reports it had considered replacing Musk, even as investors grow uneasy about falling sales and Musk’s political entanglements. Tesla will report Q2 results between July 21-25, 2025, with analysts watching whether the refreshed Model Y can reverse slumping demand.
Musk Under Fire, Board Stands Firm
Investor anxiety spiked after the Wall Street Journal reported that Tesla’s board debated ousting Musk over his distractions and declining auto business performance. Chair Robyn Denholm denied the claims, stating the board has “high confidence” in Musk’s growth plan.
Tesla without Musk? Board faces unique challenge whether he stays or goes https://t.co/xzLW7fygqI https://t.co/xzLW7fygqI
— Reuters (@Reuters) May 2, 2025
Musk, who leads five other firms and has embraced U.S. political figures polarizing Tesla’s liberal customer base, remains central to the brand. Analysts warn that replacing him would be nearly impossible. Gene Munster of Deepwater Asset Management declared, “Is Musk bigger than Tesla? The answer is yes.”
Internal discussions suggest Tesla executives have urged Musk to appoint a day-to-day CEO while he retains figurehead status, as at SpaceX. Musk has so far refused.
European Sales Collapse Amid China Pressure
The business strain is clearest in Europe, where Tesla’s sales crashed 37.2% in Q1 even as the broader EV market expanded. April brought more pain, with an 81% drop in Sweden and steep falls in the Netherlands (74%), France (59%), and Denmark (67%).
Analysts blame both fierce competition from cheaper Chinese EVs like BYD and growing customer backlash against Musk’s politics. Tesla is now resorting to car loan discounts and incentives across Germany, Britain, and France to stoke demand.
Andy Leyland, co-founder of SC Insights, said Tesla’s once-lofty technology lead has faded, noting, “Competition from both legacy auto and Chinese entrants will be weighing on sales.”
Can Model Y and Robotaxis Save Tesla?
Hopes now rest on the upcoming rollout of a revamped Model Y in Europe, expected to start deliveries in June. Yet even bulls concede the company’s over $700 billion market cap depends largely on Musk’s promises of future robotaxis and humanoid robots—products that have yet to materialize.
With Tesla’s executive bench thinning and rivals closing in, the next quarter’s earnings will be pivotal. Investors will be watching whether Tesla can halt its sales slide and whether Musk’s grip on the company remains unchallenged amid mounting scrutiny.
