Elon Musk is losing the confidence of employees, survey says

By Melody HahmSenior Writer

Shares of Tesla (TSLA) are under pressure once again on a slew of recent reports that shed light on Elon Musk’s leadership style. And it calls into question whether employees believe he is suited to lead the company.

Yahoo Finance commissioned Blind, an anonymous workplace community, to survey employees of Tesla and Musk’s aerospace company, SpaceX, after a double dose of bad news last week — that Tesla is shuttering most of its stores, and that the SEC is seeking to hold Musk in contempt over recent tweets about the company.

(Yahoo Finance/David Foster/Aarthi Swaminathan)
(Yahoo Finance/David Foster/Aarthi Swaminathan)

A total of 235 people took the survey, with 131 employees, or 55.74% of respondents, saying they were confident that Musk is fit to lead the electric carmaker. Blind said that 104, or 44.26%, are not confident that Musk is fit to lead.

Blind conducted a survey less than two weeks earlier showing that over 77% of Tesla and SpaceX employees were confident he was fit to lead.

The latest bad news for Tesla

Last week, the electric carmaker announced plans to shutter most of its stores and transition to online-only purchasing. This caught many employees by surprise and several salespeople only found out about the move through a public post from the “Tesla team,” according to new reporting from Bloomberg.

Elon Musk, CEO of SpaceX, speaks during a news conference after the SpaceX Falcon 9 Demo-1 launch at the Kennedy Space Center in Cape Canaveral, Fla., Saturday, March 2, 2019. (AP Photo/John Raoux)
Elon Musk, CEO of SpaceX, speaks during a news conference after the SpaceX Falcon 9 Demo-1 launch at the Kennedy Space Center in Cape Canaveral, Fla., Saturday, March 2, 2019. (AP Photo/John Raoux)

Musk has also had a contentious relationship with the SEC mostly stemming from his tweeting. He and Tesla each agreed to pay $20 million over Musk’s tweet that he was “considering taking Tesla private at $420” in his now-infamous “funding secured” claim. As part of the settlement, Musk had to step down as chairman of the company and also agreed to get legal approval for any tweet that could materially impact the company.

SEC officials claimed last week that Musk violated the settlement when he tweeted that Tesla would produce 500,000 cars in 2019. Several hours later he tweeted a follow-up, noting “deliveries for year still estimated to be about 400k.”

‘I am confident in Elon Musk’s ability to lead’

Before last week, Tesla still faced scrutiny from all sides — legislators, shareholders, activist investors, media, and not to mention former executives who have left. Given that scrutiny, Blind conducted a survey from February 14 to February 21 to gauge how much current employees believe that Musk is fit to lead.

Blind, which requires users to sign up with their corporate email accounts, has 1,400 Tesla and 250 SpaceX employees on the platform. The survey asked the collective 1,650 employees to answer with TRUE or FALSE to this statement: “I am confident in Elon Musk’s ability to lead the company.”

Initially, the survey ran from February 14 to February 21, 2019 and was answered by 284 people. Blind said that 221 people, or 77.82% of respondents, said they believe that statement while only 63, or 22.18%, said they do not. Users could only answer once, and this is a purely quantitative survey, with no room for respondents to explain their vote.

The second version of the survey was conducted at the behest of Yahoo Finance between February 27 and March 4. Blind asked Tesla and SpaceX employees whether they agree or disagree with the following statement: “Since the latest conflict with the SEC, I am confident in Elon Musk’s ability to lead the company.”

A total of 235 people took the survey, with 131 employees, or 55.74% of respondents, saying they believe that Musk is fit to lead the electric carmaker. Blind said that 104, or 44.26%, now believe that Musk is not fit to lead. Tesla did not immediately respond to Yahoo Finance’s request for comment.

Tesla stock is down 16.35% since the start of 2019 and down 6.3% in the last week alone. Musk has until March 11 to prove to the SEC that he’s not in contempt.

Melody Hahm is a senior writer at Yahoo Finance, covering entrepreneurship, technology and real estate. She hosts Breakouts, a monthly interview series for Yahoo Finance featuring up-close and intimate conversations with today’s most innovative business leaders. Follow her on Twitter @melodyhahm.

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