Amid fraud claims, Elon Musk has decided to stepped down to his post after settlement of United States authorities last month.
Musk stepped down as chairman and the board has chosen new chairman in the person of Robyn Denholm.
Denholm, is the finance chief of Australian telecoms firm Telstra, however Musk will stay as chief executive.
Musk agreed to step down as chair last month to resolve claims of fraud brought by US financial regulators.
The settlement requires Tesla to install an independent chairman, among other penalties.
The announcement scotches reports that James Murdoch was the frontrunner for the job.
Tesla has endured a difficult few months, following comments Musk made on social media in early August suggesting he had “funding secured” for a deal to take Tesla private.
Its shares soared following his comments but weeks later Musk backed away from the plan, blaming feedback from shareholders.
US authorities sued the entrepreneur for misleading investors and he and Tesla were each fined $20m.
Also, Musk was also obliged to relinquish his role as chairman for three years.