By Björn Jeffery, SvD Tech Brief. Published in Svenska Dagbladet on 10 March 2025.

Around 8,000 billion kronor in market value has been erased from Tesla in recent weeks. Meanwhile, the company’s CEO Elon Musk is busy with politics that is driving away customers. No other listed company would be allowed to be run like this.

For seven consecutive weeks, Tesla’s share price has fallen. That is the longest such decline the company has experienced since it was listed on the stock exchange in June 2010. Since the start of the year, almost 45 percent of the company’s market value has gone up in smoke.

In normal circumstances, the head of such a company would be working day and night to restore market confidence. But nothing is normal when it comes to Tesla.

Having a well-known and admired figurehead is a familiar strategy. Steve Jobs was long synonymous with Apple, Warren Buffett with Berkshire Hathaway, and Richard Branson with Virgin. The more exciting the person in question, the greater the interest in the company too.

But the risk of this strategy is precisely what Tesla is experiencing right now. As a business leader, one probably still has to consider Elon Musk “exciting” — just perhaps not in the way Tesla’s shareholders appreciate. While he stands alongside Donald Trump in the Oval Office, or at a political event with a chainsaw in his hand, there is an electric vehicle company whose share price is suffering.

Yes, there are executives at Tesla who can manage the business without Musk — who also runs the companies SpaceX, xAI, X, and Neuralink. But appearances matter. You cannot simply take the positive associations of a CEO. Now that public opinion has turned against him in several markets, not least in Europe, Musk has become a liability for Tesla.

In a situation like this, one should look at the board’s responsibility. In an ordinary listed company, they could have fired the CEO by now.

Chair Robyn Denholm has taken action, but not through public statements. She has, however, sold Tesla shares worth around 1.17 billion kronor since the start of the year. Elon Musk is Tesla’s largest shareholder with around 20 percent of the shares. The remaining shares are owned by others — pension funds and the like. Tesla is, for example, one of both the Fourth and Seventh AP Funds’ largest holdings. The Tesla board has a responsibility to represent their interests as well as those of its major shareholder. So why is nothing happening?

One answer comes when you look at the board’s composition. There you find JB Straubel, one of Tesla’s co-founders who served as the company’s chief technology officer for 15 years. Straubel is likely to be unusually knowledgeable, but has been a direct colleague of Musk for more than a decade.

Another name is James Murdoch, one of media mogul Rupert’s sons, who is a personal friend of Musk. A third has a familiar ring — Kimbal Musk, Elon’s brother. And in true American fashion, Elon Musk himself also sits on the board. In total there are eight members, but their independence is open to question.

Tesla therefore finds itself in a difficult position. The electric vehicle company is being held hostage, in effect, by a chief executive and major shareholder who has historically been its single greatest driver of success. It is Musk’s visions that have meant the stock has long since stopped being traded as a car company on the exchange.

Statements such as “there is a path for Tesla to become more valuable than the next five largest companies in the world combined” — something he said at the most recent quarterly report — are spectacular and conjure images of robots, self-driving cars and AI instead. The approach, whether he is right or wrong, has been successful.

But as much attention as Musk has received for his visions, he is now receiving for other things — such as, for example, suggesting that the US should leave NATO and the United Nations.

Sales of Tesla cars are falling sharply in several European countries. In a private company, his room for manoeuvre would have been greater. But Tesla is a listed company. His freedom depends on the remaining shareholders concluding that Tesla is worth more with Musk than without him. That equation has until now been extraordinarily straightforward. If the share price keeps falling in the same way, it will become considerably more complicated.