A group of Tesla Inc. investors has accused the company of mismanagement and is seeking a meeting with its board to discuss the performance of Chief Executive Officer Elon Musk.

The 17 shareholders, who hold more than US$1.5 billion of Tesla stock, said Musk is distracted by his commitments to other companies and must be reined in, according to an open letter they sent to Chairwoman Robyn Denholm and Director Ira Ehrenpreis Friday. They want the board to come up with a plan to do so and seek to remove directors too closely tied to the CEO.

“There is collective frustration,” said Ivan Frishberg, the chief sustainability officer for Amalgamated Bank, which has 722,070 shares in Tesla across its various funds. “Over the last year, it became quite clear that Tesla suffers from a governance problem.”

While governance complaints are nothing new for Tesla, they only add to the list of challenges facing the EV maker. Earlier this week, the company reported lackluster first-quarter earnings after aggressive price cuts it undertook to fend off competitors squeezed profits. Musk said he plans to slash prices further, even if it hurts margins, sending the stock plunging more than 10 per cent on Thursday.

Read More: Tesla Sinks as Musk Eyes More Price Cuts Despite Margin Squeeze

Amalgamated Bank, New York City pension funds and other signatories to the letter want Musk to focus so he can navigate the increasingly competitive EV market and regulatory scrutiny. The company is facing probes by the US Department of Justice, the National Highway Traffic Safety Administration and California's Department of Motor Vehicles over its autopilot system.

While Tesla's stock plummeted Thursday, the billionaire CEO was watching a rocket from another company he founded and runs — SpaceX — explode above Boca Chica, Texas, shortly after liftoff.

The Austin, Texas-based carmaker is now worth half its US$1.2 trillion market cap on April 4, 2022, when Musk first disclosed his stake in Twitter Inc., the investors pointed out. He ultimately bought the social media company and has run it since October. 

“It is unprecedented to be a CEO and also be running two other companies at the same time,” said Courtney Wicks, executive director of Investor Advocates for Social Justice, which represents several faith-based investors. “I can't imagine any other board allowing a CEO to have as many outside business activities.”

Earlier this year, another Tesla investor — who isn't associated with the letter — filed a resolution asking the company to create a plan to address its reliance on Musk. Tesla's board has recommended shareholders vote against the proposal at the company's May 16 annual meeting. While those types of resolutions face a tough road to success, the carmaker's poor recent stock performance may rankle investors otherwise inclined to side with the company.

Some of the shareholders who signed onto the letter have brought resolutions to the company's annual meeting in the past. This year's proxy contains just one resolution, down from eight in 2022 — in large part because news Tesla was rescheduling the meeting was buried in a regulatory filing.

The letter goes on to a list of series of other issues the investors argue put the company at risk. Among them: the company's litigation with the state of California over the treatment of Black employees at Tesla's Fremont factory, the use of mandatory arbitration and the termination of employees who were involved in a union organizing effort in Buffalo, New York. 

The group also criticized Tesla for opening a showroom in Urumqui, the capital of the Xinjiang Uyghur Autonomous Region in China. Activists and politicians have accused China of committing human rights abuses in the area.