Tesla’s Shocking Collapse: Will Elon Musk Be Forced Out?
May 5
5 min read
A Billion-Dollar Empire on the Brink
A trailblazing CEO, hailed as the architect of the electric vehicle revolution, now facing the unthinkable—being ousted from his own company. Elon Musk, the larger-than-life force behind Tesla, is staring down a crisis that could end his reign. With Tesla’s stock cratering 36% in 2025, sales plummeting across Europe, and whispers of a boardroom coup, the question looms: How did it all go so wrong, so fast? Dive into this gripping saga of ambition, betrayal, and a company teetering on the edge.
The Fall: How Tesla Reached Breaking Point
Tesla’s descent isn’t a single misstep—it’s a perfect storm of economic chaos, political blunders, and internal unrest. Here’s how it unraveled.
Trade Wars and Economic Squeeze
The Trump administration’s 2025 tariffs have slammed Tesla, especially in China, its second-largest market. Retaliatory tariffs from Beijing have jacked up Tesla’s prices, making them less competitive against local giants like BYD. These tariffs have “severely impacted” Tesla’s profitability, with imported components driving costs skyward. Tesla’s push to localize its U.S. supply chain is stalling—key parts like lithium-ion cells remain China-dependent, forcing price hikes that customers resent.
The numbers are brutal.
The European Automobile Manufacturers’ Association (ACEA) reports a 47.7% drop in Tesla registrations in Europe for January 2025, with Spain (-75.4%) and France (-63.4%) hit hardest. Even in California, Tesla’s sales fell 12%. This isn’t just a market dip—it’s a full-blown crisis.
Musk’s Political Missteps Alienate Fans
Musk’s political forays have turned Tesla’s brand toxic for many. His assumed support for Germany’s far-right party, including a 75-minute X platform for its leader, has sparked outrage. A 2025 poll shows Tesla’s European favorability plummeting from 62% in 2023 to 38%, with 59% of EV buyers citing Musk’s politics as a dealbreaker. In Germany, Tesla owners are slapping “I bought this before Elon went crazy” stickers on their cars—a viral jab at Musk’s image.
In the U.S., Musk’s role in Trump’s Department of Government Efficiency (DOGE) has backfired. His inflammatory comments, like calling Social Security a “Ponzi scheme,” have alienated liberal buyers. It a “political firestorm,” with insiders claiming Musk’s DOGE stint has “torched” Tesla’s brand.
Internal Chaos and a Fractured Team
Inside Tesla, the mood is grim. On March 20, 2025, Musk pleaded with Austin Gigafactory workers to hold their shares despite a 40% stock slide in three months. Reports of employees selling their Tesla cars signal a crisis of confidence. Early investor Ross Gerber has publicly demanded Musk’s resignation, arguing his focus on DOGE, SpaceX, and X has left Tesla adrift.
The board isn’t sitting idle. Reports of a Q2 2025 CEO succession plan suggest Musk’s days may be numbered.
Musk’s exit could erase $220 billion in shareholder value—a 20-25% stock hit. Musk dismissed departure rumors as “false” on X, but the pressure is undeniable.
The evidence is stark. Tesla’s Q4 2024 earnings showed global sales slipping to 1.79 million vehicles from 1.81 million in 2023. Q1 2025 was worse: sales down 13%, profits down 71%. The stock, once a Wall Street star, closed at $389.65 in January 2025, down 2.12% in a single day.
Consumer trust is eroding. 15% drop in Tesla’s U.S. customer satisfaction score is tied to Musk’s “divisive” persona. Experts are sounding alarms blaming “brand damage” for Tesla’s sales woes, Musk’s antics create a “ripple effect” across stakeholders.
What’s Happening Now?
As of now, Tesla is scrambling to recover. Musk stepped back from DOGE in April, vowing to refocus on Tesla—a move that sparked a 5% stock pop. He’s betting big on autonomous driving, teasing new affordable models for mid-2025 and hyping robotaxis as a game-changer. But delays in Tesla’s self-driving tech and regulatory roadblocks cast doubt on these promises.
The board’s succession talks continue, with names like CFO Vaibhav Taneja and former COO Jerome Guillen floated as replacements.
The Future: Three Paths Forward
1. Musk Fights to Stay
If Musk clings to the helm, he’ll need a miracle to restore Tesla’s shine. Need a brand detox, distancing Tesla from Musk’s controversies. Affordable models could win back buyers, but BYD and Volkswagen are closing in. There are high chances, Tesla’s global market share could shrink from 19% to 14% by 2027 without a turnaround. Musk’s political baggage risks further alienating progressive markets like Europe, with a 20% higher churn rate for brands with polarizing leaders.
2. Musk Exits, Tesla Reinvents
Musk’s ouster—whether forced or voluntary—is gaining traction.
The odds are 44% for a board-led removal in 2025, 33% for a voluntary exit.
A new CEO could stabilize Tesla by refocusing on operations and neutrality, but a $220 billion valuation is at risk. Could Musk pivot to a Chief Technology Officer role, steering innovation while a new leader handles the business? It’s a long shot, given his all-or-nothing style.
3. Wild Cards and Game-Changers
Unexpected twists could redefine Tesla’s fate. A global recession, fueled by U.S. debt fears Musk has flagged, could crush EV demand. Conversely, a breakthrough in Tesla’s Full Self-Driving tech could catapult it back to dominance—Cathie Wood’s $0.25-per-mile robotaxi dream is compelling, but its going to take some time. A U.S.-China trade détente could ease tariffs, though current tensions make that unlikely.
Beyond the Headlines
Tesla’s crisis isn’t just about Musk or money—it’s personal. Q1 2025 layoffs slashed 5,000 jobs at Fremont and Shanghai factories, hitting workers and local economies. Suppliers, from battery recyclers to software firms, face order cuts, estimating 120,000 global jobs at risk if Tesla falters long-term.
The ripple effects are global. Tesla’s struggles could stall the EV revolution, with the International Energy Agency noting that its price hikes are dampening adoption. This could delay net-zero goals, while handing China’s BYD a chance to dominate—a geopolitical shift with massive implications.
For TheBrink2028 Readers
Investors: Tesla’s 36% YTD stock drop screams caution. Diversify with ETFs like the KraneShares Electric Vehicles Index to spread EV risk. Short-term traders might eye put options if succession talks escalate.
Buyers: Hold off on Tesla purchases until mid-2025 for cheaper models, but test-drive other EVs for better value and less drama.
Workers: Tesla employees should upskill in AI or battery tech and network with rivals like Lucid to hedge against layoffs.
Policymakers: Boost EV subsidies to counter tariffs, but keep them broad to spur competition, not just prop up Tesla.
Historic CEO Oustings: Lessons from the Past
Musk wouldn’t be the first visionary CEO to face a dramatic exit. History is littered with high-profile oustings that mirror Tesla’s turmoil.
In 1985, Apple’s Steve Jobs was forced out by his own board after clashing with CEO John Sculley, a move that saw Apple’s innovation stall until Jobs’ triumphant return in 1997.
Similarly, Uber’s Travis Kalanick was ousted in 2017 amid scandals over workplace culture and regulatory violations, paving the way for Dara Khosrowshahi to stabilize the company.
General Motors’ Fritz Henderson was pushed out in 2009 during its bankruptcy, replaced by Ed Whitacre to steer a government-backed recovery.
These cases highlight a pattern: boards act when a CEO’s vision becomes a liability, triggering short-term pain but long-term renewal. Musk’s situation echoes these, with his polarizing persona and divided focus drawing parallels to Kalanick’s fall—yet his unique role as Tesla’s product architect makes his potential exit far riskier.
Make-or-Break Moment
Tesla’s implosion is a masterclass in how genius can court disaster. Musk’s vision built a titan, but his political gambles and stretched focus have pushed it to the edge. Whether he stays, goes, or reinvents his role, Tesla’s next chapter will shape the future of mobility, jobs, and markets. For TheBrink2028 readers, this is your front-row seat to a corporate drama with global stakes. Will Musk pull off a comeback, or is his exit the reset Tesla needs? Stay tuned—the road ahead is electric, and it’s about to get wild.
-Chetan Desai (chedesai@gmail.com)
