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The abrupt departure of Tesla Inc.’s chief financial officer, Zachary Kirkhorn, is a loss for the EV maker, as he was one of the more reasonable adults in the room on the company’s conference calls with Chief Executive Elon Musk and investors.
In a brief 8K filing with the Securities and Exchange Commission, Tesla
TSLA,
announced Kirkhorn’s departure from the electric vehicle maker, as of Friday, Aug. 4. The stock closed Monday down 1%, though it fell nearly 3% at one point in intraday trading. The 13-year Tesla veteran was replaced by Vaibhav Taneja, previously Tesla’s chief accounting officer. Kirkhorn was CFO for four years.
On the company’s last quarterly call, it was Kirkhorn who reminded investors that Tesla does not comment on its future road map, in response to a question about any more upcoming Tesla energy products, possibly trying to head off any unforeseen new-product announcements by Musk.
In addition, one emailed investor question asked when automotive gross margins would stabilize, after declining in the second quarter as Tesla lowered prices. Musk’s response was, “Oh, man. Where’s that crystal ball again?” Then he later went on to predict autonomy, or full self-driving, would make all the current numbers look silly, adding that “Tesla is an epic long-term investment.”
Kirkhorn then chimed in, saying he agreed with Musk, but then added, “I think the only thing in the short term that matters is what I said in my opening remarks, which is: Are we generating enough money to continue to invest? And the portfolio of products and technologies that the technical teams are investing in right now, this is intense. It’s intense in terms of investment.”
In the first quarter, after executives were asked for more color on updated margin guidance, Musk said it all depended on macroeconomic conditions, but that barring any major geopolitical wild card, “I think I would be very optimistic about middle of next year, end of next year.” Kirkhorn followed up quickly, adding, “What’s really important for us this year in addition to just managing the day-to-day of the business, is also investing in, as Elon mentioned, what 2024 and 2025 will look like.”
“But I just want to caution folks about reading too much into what happens over the near term here, because we’re very focused as a company on making sure that, when we exit this macroeconomic situation, this company is positioned in the best possible way,” he added.
RW Baird & Co. analyst Ben Kallo said in a note to clients Monday that he was maintaining his outperform rating on Tesla, indicating he was not concerned about the transition.
Stephen Diamond, an associate professor of law at Santa Clara University pointed out that four years “is a long time to survive under Musk,” adding that, like lawyers, “CFOs are pretty fungible.”
Gary Black, managing partner at the Future Fund and a Tesla investor, speculated that Kirkhorn has made enough money to retire, and approached Musk with the idea that it was time for him to move on, and Musk asked him to reconsider. “Zach reconsidered and told him he still wanted to leave, Elon took it badly,” he said on X, the service now owned by Musk and formerly known as Twitter.
Whatever the reasons are behind Kirkhorn’s abrupt departure, the question investors may be asking now is whether or not Taneja will be able to slightly rein in Musk, as Kirkhorn has been somewhat able to do — or will Musk start in again making ever wilder statements and forecasts?
