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Tesla's finance chief Kirkhorn unexpectedly steps down

Published Aug 07, 2023 09:15AM ET Updated Aug 08, 2023 02:41PM ET
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© Reuters. FILE PHOTO: A Tesla logo is seen outside a showroom of the carmaker in Beijing, China May 31, 2023. REUTERS/Thomas Peter/File Photo
 
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By Akash Sriram

(Reuters) -Tesla finance chief Zachary Kirkhorn has stepped down, surprising analysts who considered the company veteran of 13 years as a possible successor to CEO Elon Musk.

The world's largest electric vehicle automaker did not give a reason for the departure. Vaibhav Taneja, 45, replaced Kirkhorn as of Friday and will also retain his role as head of accounting. Kirkhorn plans to stay on at Tesla (NASDAQ:TSLA) until the end of the year to support "a seamless transition," it said.

The depth of Tesla's executive bench and the company's succession planning have been issues of concern for investors, especially since Musk's 2022 purchase of Twitter, now known as X. In addition to his responsibilities at Tesla and X, Musk is also CEO of satellite firm SpaceX and owns brain-chip startup Neuralink.

Kirkhorn was seen as an effective and soft-spoken balance to the more volatile Musk and was one of the most visible executives who often spoke on calls with analysts and made presentations on strategy and products.

"He was able to be an effective liaison communicator between Elon and other executives ...that would be a skill set that is hard to come by and very valuable but hard to quantify," said Thomas Martin, senior portfolio manager at Globalt Investments, a Tesla investor.

Shares of Tesla were down 1% in trading after the bell.

Kirkhorn's departure comes as Tesla readies the first deliveries of its delayed Cybertruck and works to complete a plant in Mexico dedicated to a mass-market EV that will be the basis for a robotaxi.

During Kirkhorn's tenure, Tesla posted its first quarterly profit after ramping up production of the Model 3 compact sedan and hit a market valuation of more than $1 trillion.

"Being a part of this company is a special experience and I'm extremely proud of the work we've done together since I joined over 13 years ago," Kirkhorn said in a LinkedIn post.

Kirkhorn did not respond to queries when contacted on LinkedIn.

"That he's going to be around until the end of the year is evidence that this is just for personal reasons and the personal reason is likely that working with Elon Musk is really hard and he's done it for 13 years," said Gene Munster, managing partner at Deepwater Asset Management.

Kirkhorn's decision to step down marks the highest profile executive change at the company since long-time executive Jerome Guillen, who oversaw its electric Semi truck development, left in 2021.

"I would like to thank Zach Kirkhorn for his many contributions to Tesla over the course of 13 often difficult years. Much appreciated and best wishes for the next stage of his career," Musk said in a post on X.

Taneja spent nearly 17 years at PricewaterhouseCoopers, one of the big four accounting firms, before joining solar panel maker SolarCity in 2016, the same year that it was acquired by Tesla for $2.6 billion.

At Tesla's shareholder meeting in May, investors rejected a proposal that asked the board to report on Tesla's "key person" risk. Musk said then he had no intention of leaving.

Tesla director James Murdoch said in November that Musk had identified a potential successor without naming that person.

The Austin, Texas-based automaker this year cut prices of its cars across all of its markets in a move that prioritizes sales growth and market share but squeezes its industry-leading margins. It has also hinted at more price cuts in what Musk called "turbulent times."

Many analysts have accepted the case for Tesla's valuation and its ability to fund its aggressive growth plans - in part because of the company's success in taking costs out of production.

"In this industry, in this business, you survive or you die based upon the ability to manage your costs," Kirkhorn said at Tesla's investor day in March.

Tesla's finance chief Kirkhorn unexpectedly steps down
 

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Comments (3)
Zulfiqar Ali
Zulfiqar Ali Aug 08, 2023 3:12PM ET
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Exit of Mr Kirkhorn not good sign
Minh Vo
Minh Vo Aug 08, 2023 4:35AM ET
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Short sell big win
Mesna Kroglica
Mesna Kroglica Aug 07, 2023 5:32PM ET
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Or perhaps he just wants to do something else in his life? He's been with a company for 13 years. Thats a very long time.
 
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