Tesla is a business in crisis and it’s time for Elon Musk to be replaced as its CEO, says an investment industry veteran who was an early investor in the EV maker.
Ross Gerber, whose Los Angels based RIA Gerber Kawasaki Wealth & Investment Management has AUM of around $3.3 billion, has been critical of Musk’s stewardship of Tesla for some time, but his explicit call for the billionaire entrepreneur to step down is now his position.
“I think Tesla needs a new CEO and I decided today I was going to start saying it and so this is the first show that I'm saying it on,” he told NBC sister channel Sky News on Tuesday, adding that the firm has been “neglected for too long.”
In reference to Musk’s focus on DOGE, Gerber said that he should either give up his government job to run Tesla or find a suitable replacement to lead the firm.
Tesla has seen its market cap plunge by around $800 billion since December with its share price down 52%; it’s the worst performer on the S&P 500 so far this year. But it’s not only concern that its CEO is now a part timer that is rattling investors’ confidence.
While EV sales have continued to grow, the first half of 2024 saw a slight downturn in the percentage of purely electric vehicles relative to the total US market, while President Trump’s executive order to “eliminate the electric vehicle mandate” and a mistrust among many Americans of calls to move away from fossil fuels is not supportive of the industry.
But Musk’s divisiveness is a key factor with diehard fans – many of whom may already own a Tesla – often outnumbered in polls by those who are not impressed with his DOGE activities and urging others to boycott the EV brand.
Another blow was dealt to Tesla this week as Chinese rival BYD announced technology that it says can charge an EV as quickly as a gas vehicle can refuel. Tesla shares fell almost 7% on the news.
“Range-anxiety and long charging times are among the top hurdles for EV purchases,” Thomas Thornton, founder of Hedge Fund Telemetry told Bloomberg. “Any time a company solves a problem as big as this for the EV industry, it will be a game changer.”
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