On April 17, 2025, treasurers from eight US states issued a stern open letter to Tesla Inc.’s board chair, Robyn Denholm, expressing deep concerns over the company’s recent performance and CEO Elon Musk‘s divided attention. Published via Americans for Responsible Growth, the letter highlights Tesla’s critical role in the electric vehicle (EV) sector while questioning whether its leadership can steer the company through mounting challenges, reports Bloomberg.

Tesla’s Struggles Signal Broader EV Market Risks

Tesla, headquartered at 1 Tesla Road, Austin, TX 78725, has faced significant headwinds in 2025. The company’s stock plummeted over 50% from its mid-December 2024 peak, a decline exacerbated by disappointing first-quarter deliveries and a surge in vehicle trade-ins. These metrics, as noted by Bloomberg, reflect waning consumer confidence and operational struggles.

The treasurers, representing states like California, Illinois, Washington, and Massachusetts, emphasized Tesla’s pivotal role in the clean energy economy, stating, “Tesla, Inc. is not just one of the world’s most valuable companies—it is a major player in the clean energy economy and a leading force in emerging technologies such as robotics and autonomous driving.”

The letter underscores the broader implications of Tesla’s performance. A faltering Tesla could disrupt regional economies, particularly in states heavily invested in EV adoption. California, for instance, remains a hub for Tesla’s manufacturing despite the 2021 headquarters shift to Texas. States like Colorado and Connecticut, which have adopted California’s stringent EV sales standards, also face risks if Tesla’s setbacks undermine public trust in the energy transition.

Musk’s Divided Attention Raises Governance Concerns

The treasurers pointedly criticized Elon Musk’s focus, noting his involvement in multiple ventures and a high-profile advisory role in the federal government. “CEO Elon Musk continues to divide his attention across multiple companies and a high-profile advisory role within the federal government,” they wrote, raising “serious questions about whether Tesla’s leadership is fully engaged in addressing the company’s core challenges.” Musk’s political engagements, initially seen as a boon, have instead triggered a global backlash, further eroding investor confidence.

The letter demands clarity on three fronts: how the board ensures Musk’s focus on Tesla, whether executive compensation aligns with shareholder value, and the strategy to restore investor trust. The treasurers stressed the board’s fiduciary duty, stating, “The board’s role is especially critical now—to provide strong oversight, uphold fiduciary standards and ensure that the company’s leadership is aligned with the long-term best interests of the company.”

Regulatory and Market Implications for the EV Sector

Tesla’s challenges coincide with a pivotal moment for the EV industry. States like Washington and Massachusetts have set aggressive targets to boost EV adoption, often modeled on California’s regulations, which mandate increased zero-emission vehicle sales. A weakened Tesla could slow these initiatives, as the company’s innovations in battery technology and autonomous driving set benchmarks for competitors. Moreover, Tesla’s global supply chain and production facilities support thousands of jobs, making its stability a matter of economic significance.

The treasurers’ intervention also signals heightened regulatory scrutiny. Public officials rarely weigh in on corporate governance unless systemic risks emerge. Their involvement suggests potential future oversight of EV manufacturers, especially those pivotal to state-level climate goals. For EV owners and investors, this could mean greater accountability but also increased pressure on Tesla to deliver consistent results.

EVXL’s Take: A Wake-Up Call for Tesla and the EV Industry

The treasurers’ letter serves as a critical wake-up call for Tesla and the broader EV sector. While Musk’s visionary leadership has propelled Tesla to a leading position, his divided focus risks derailing the company at a time when the industry faces growing challenges. Tesla must address these governance concerns transparently to maintain its leadership in the EV market. For enthusiasts and owners, this moment underscores the importance of diversified innovation in the sector—relying solely on Tesla to drive the energy transition may no longer be sustainable. The board’s response, expected alongside Tesla’s Q1 2025 earnings on April 22, will be a litmus test for the company’s future trajectory.

Photos courtesy of Tesla.