In an unprecedented move that has sent shockwaves through the automotive and tech industries, a growing contingent of Tesla employees has formally called for the resignation of CEO Elon Musk. This internal rebellion comes amid deepening concerns about the company’s leadership direction, plummeting demand for its vehicles, and Musk’s increasing political activities that many believe are damaging the Tesla brand.
The Employee Ultimatum
A group of current and former Tesla employees recently published an open letter directly challenging Musk’s leadership and calling for his removal as CEO. The letter doesn’t mince words about the crisis they believe the company is facing: “The damage done to Elon’s personal brand is now irreversible and as the public face of Tesla, that damage has become our burden,” the letter states. “We are now at a crossroads: continue with Elon as CEO and face further decline as customers abandon the brand, or move forward without him and allow our products and mission to succeed or fail on their own.”
The extraordinary step of publicly calling for the CEO’s resignation illustrates the depth of concern within the company about its current trajectory. One of the letter’s organizers, Matthew LaBrot, a five-year Tesla veteran who served as Staff Program Manager for Sales and Delivery Training Programs, was reportedly terminated shortly after the letter was published. This swift reaction has only intensified scrutiny of the company’s leadership approach to internal dissent.
Demand Crisis Behind Closed Doors
At the heart of the employee concerns is what they describe as a “massive demand problem” that company leadership has refused to acknowledge adequately. While Tesla has officially attributed its first sales decline in a decade in 2024 and the accelerated drop in Q1 2025 to factors like the Model Y changeover, employees paint a different picture.
“Now those very cars are sitting unsold, growing week after week,” the employee letter claims. “Production is running better than ever. Quality is high. Processes are strong. Demand is what’s broken. This is not a product problem. It is a leadership problem.”
Industry data appears to support this assessment. While electric vehicle sales in the United States rose by approximately 10% in Q1 2025, Tesla’s sales fell by 9% during the same period. This divergence suggests factors specific to Tesla, rather than industry-wide trends, are driving the company’s sales challenges.
The scope of these demand issues is becoming increasingly apparent through operational decisions. Tesla has reportedly instructed workers at Gigafactory Texas on both the Cybertruck and Model Y production lines to take an entire week off, a move that signals serious concerns about inventory buildup and sales projections.
The DOGE Distraction
Much of the employees’ frustration centers on Musk’s role leading the Department of Government Efficiency (DOGE) in the Trump administration. This high-profile government position has divided his attention at a critical juncture for Tesla while simultaneously politicizing the brand in ways that many believe have alienated a significant portion of Tesla’s traditional customer base.
During Tesla’s Q1 earnings call in April, Musk announced he would reduce his time at DOGE to “a day or two a week” starting in May and refocus on Tesla. However, employees characterized this announcement as “tone-deaf” and “insulting,” arguing it “implies that the hardships of the past six months stem from a lack of his attention, not from his actions.”
The company reported a staggering 71% plunge in profits for Q1 2025, further intensifying pressure on Musk’s leadership. While the CEO has publicly dismissed concerns about brand damage, attributing Tesla’s challenges to “macroeconomic issues” and “consumer uncertainty,” employees and many industry analysts see his controversial political activities as a direct contributor to Tesla’s declining market position.
Investor Pressure Mounting
The employee rebellion comes amid growing unease from certain investors about Musk’s leadership and divided attention. Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, has been particularly vocal about the need for new leadership.
“He’s been committed to his job in the government, that’s where he’s spending his time,” Gerber told Sky News. “He is not running Tesla and that’s why I’m going to say it: Tesla needs a new CEO.”
Tesla’s stock has suffered significantly in 2025, dropping 37% since January according to reports, and has lost all gains made following Trump’s election victory. The stock had nearly doubled between election day and mid-December before beginning its steep decline.
Not all investors agree with calls for Musk’s removal, however. Christopher Tsai, another major Tesla investor, expressed “the highest regard” for Musk’s leadership capabilities while hoping his involvement with DOGE would be “temporary.” Some loyal investors have even threatened to sell their shares if Musk steps down, highlighting the polarized views about his continued leadership.
The Board’s Delicate Position
Tesla’s board of directors finds itself in an extraordinarily challenging position. The Wall Street Journal reported in late April that the board had contacted executive search firms to find a potential replacement for Musk, though board chair Robyn Denholm swiftly denied this as “absolutely false.”
The board publicly expressed it was “highly confident in his ability to continue executing on the exciting growth plan ahead,” even as concerns about Musk’s leadership and focus continue to mount from employees, certain investors, and market analysts.
Industry experts note the exceptional difficulty the board would face in replacing Musk. Brian Mulberry, client portfolio manager at Zacks Investment Management, a Tesla investor, described the challenge as “incredibly complex,” requiring someone who could fill Musk’s enormous shoes while bridging the financial challenges his leadership has created. On a 10-point difficulty scale, he rated replacing Musk as an “eight or nine.”
Gene Munster, managing partner at Tesla investor Deepwater Asset Management, was even more direct: “Is Musk bigger than Tesla? The answer is yes,” suggesting replacement might be essentially impossible.
Brand Erosion and Customer Protests
Beyond the internal challenges, Tesla is facing unprecedented external pressure as well. Reports indicate growing customer dissatisfaction, including protests at Tesla showrooms in the United States and Europe. Some Tesla owners have gone so far as to place bumper stickers on their vehicles to disassociate themselves from Musk.
The brand erosion appears to be hitting Tesla particularly hard among Democrats and liberals, who historically have been more likely to purchase electric vehicles. Industry analysts have noted that Musk’s controversial political activities have significantly harmed Tesla’s reputation among these traditional customer segments.
There have even been reports of vandalism targeting Tesla vehicles and charging stations in both the United States and Europe, further evidence of the intensity of feelings Musk’s political activities have generated.
Market Position Under Threat
Tesla’s market position as the leading electric vehicle manufacturer is increasingly under threat. Chinese automaker BYD has pulled ahead of Tesla in quarterly EV sales multiple times in recent years, including in Q1 2025. While Tesla has maintained its lead in annual sales thus far, current trends suggest 2025 might be the year it loses that title.
The competitive landscape has evolved rapidly, with traditional automakers accelerating their electric vehicle programs and new entrants establishing themselves in the market. Tesla’s first-mover advantage has eroded significantly, making leadership stability and clear strategic direction all the more critical.
What Comes Next?
The immediate future remains uncertain for Tesla. The board’s public support for Musk suggests no immediate leadership change is planned, despite the growing chorus of concerned voices. However, the unprecedented employee call for resignation marks a significant escalation in the internal tensions that have been building for months.
For Tesla to navigate these challenges successfully, industry experts suggest several potential paths forward. Some advocate for a gradual transition of power, with Musk stepping back voluntarily while helping to elevate an internally respected and externally known technology visionary to assume his role over time.
Others believe Musk might reduce his political activities after completing the initial setup of DOGE, allowing him to refocus fully on Tesla’s operations and product development. The company has promised to release “more affordable models” by the end of June and plans to launch its driverless “robotaxi” next year, ambitious targets that would require focused leadership attention.
A Pivotal Moment
What’s clear is that Tesla stands at a pivotal moment in its history. The company that revolutionized the automotive industry and accelerated the global transition to electric vehicles now faces existential questions about its leadership, strategy, and brand identity.
As one Tesla employee who signed the letter put it, “We are not the problem. Our products are not the problem. Our engineering, service, and delivery teams are not the problem. The problem is demand. The problem is Elon.”
Whether the board, investors, and ultimately Musk himself recognize and address these concerns will likely determine whether Tesla can reclaim its position as the undisputed leader in the electric vehicle revolution or becomes another cautionary tale of how even the most innovative companies can falter when leadership loses focus on core business fundamentals.
For a company built on the vision of accelerating the world’s transition to sustainable energy, the stakes couldn’t be higher—not just for Tesla, but for the broader climate goals its mission supports.