(Reuters) -Chipmaker Wolfspeed said on Monday that its board ousted Gregg Lowe as its CEO without cause, amid growing challenges from slowing demand for electric vehicles, sending its shares up about 6%.

The Durham, North Carolina-based company faced manufacturing issues at its factory, which it has announced will be shut down. It has also been struggling with slowing orders from the industrial and energy end markets.

Between a weak demand environment, Wolfspeed's existing restructuring plan and reduced capital expenditure for fiscal 2025, the new management cannot do much to ignite a rally in the shares other than a full-on sale, analysts at Charter Equity Research said.

Wolfspeed's shares are down about 85% so far this year, widely underperforming the S&P 500 and the Philadelphia semiconductor index.

The company, which makes chips using silicon carbide (SiC), a more energy-efficient material than standard silicon, counts General Motors and Mercedes-Benz among its customers.

Lowe, who has served as the company's CEO since 2017, will receive a severance payment as part of the settlement, the company said in a filing.

Lowe did not immediately respond to a Reuters request for comment.

The company also named Chairman Thomas Werner as executive chairman and said its board was conducting a search for a permanent CEO.

Wolfspeed had forecast quarterly revenue below Wall Street estimates earlier this month and said it would book $174 million in restructuring charges for the planned closure of a facility.

The company also announced to lay off 20% of its workforce on its latest post-earnings call. Last month, it had also dropped plans to build a factory in Ensdorf, Germany, citing the slower adoption of EVs in Europe.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Anil D'Silva and Alan Barona)