TSLA: Staff Exit Is Risk To Earnings & Future?
On Tue, 23 Apr 2024 $Tesla Motors(TSLA)$ reported its terrible earnings, coming in much worst than Wall Street expectations.
By a stroke of genius marketing & luck, the CEO successfully diverted investors and analysts’ attention from the set of deficit data to something intangible and in the future.
He had everyone tuning in at the earnings’ call, eating out of his hand.
And just like that Tesla went from a falling to rising stock. (see below)
When market was worried about the state of the economy, Tesla was not spared either.
It fell to its recent low of $140.17 on Mon, 22 Apr 2024.
After Tuesday earning calls, the stock began to regained lost grounds over Wednesday & Thursday.
The momentum fizzles out by the time Friday came around.
Decline Catalysts.
From all that I have read, its down to 2 reasons:
Senior staff departure.
Renewed probes into Tesla recent crashes.
Staff Departure.
Tesla’s longtime VP of investor relations Martin Viecha announced on Tuesday that he would leave the electric car company after 7 years.
His exit marks the 3rd departure of top executives from the carmaker in less than 2 weeks.
The other 2 executives were:
Drew Baglino. 1 of 4 named executives in Tesla with 18 years under his belt. He led the engineering & technology development for Tesla’s batteries.
Rohan Patel. VP of public policy & business development; where he handled public policy and business deals for Tesla.
His offer of “take a break and spend a lot of time with my family” is the usual nondescript and politically correct scripted reply in any departure note.
To have so many top executives leaving in a span of 2 weeks and at a time many considered a crucial crossroads for the company after its worst quarter in four years is definitely food for thoughts.
The exits have rattled some Tesla investors who have been critical of Musk. In particular, because it had been Viecha who had solid relationships these Tesla’s investors, including those who were perplexed by some of Musk’s behavior.
In short, Viecha had been the glue between management, shareholders and investors.”
CEO of Gerber Kawasaki Wealth & Investment Management best summed it up:
Yet another executive leaving the company, especially during such a delicate time in its history, could indicate a pattern.
Musk continues to lose seasoned top executives during this really important transition is indeed concerning,
“The monkey in the room is that there is no demand for the vehicles, even if they flew”.
Tesla - New Crashes.
On Fri, 26 Apr 2024 - the National Highway Traffic Safety Administration (NHTSA) opened a new investigation into Tesla’s recalls:
In December 2023, Tesla recalled nearly all their cars with Autopilot (a driver-assist system).
The recall aimed to prevent "driver misuse" by making sure drivers stayed attentive with Autopilot on.
Now, NHTSA is concerned because accidents still happened after the software update and drivers might be able to easily turn off the fix Tesla had added.
NHTSA concerned about crashes and their own tests.
NHTSA is still worried about Tesla's Autopilot recall, even after the December 2023 update.
They found crashes and issues in their own testing of updated Teslas’s software.
Tesla hasn't commented on this yet.
Tesla's self-driving plans face challenges.
Tesla wants to make self-driving cars (robotaxis) but their current driver-assist system (Autopilot) has problems.
This does not bode well for fully self-driving (FSD) cars, which are even harder to make.
Experts say Tesla's robotaxis might be years away, even if they solve the problems.
Reaching full self-driving takes time and testing.
Tesla promised self-driving cars 8 years ago, but experts believe they are still far off.
Other companies trying to build self-driving cars are also facing difficulties.
Autonomous expert Alex Roy (formerly of Argo AI), highlighted that Tesla needed to be operating and testing its autonomous software in at least 5 metropolitan test areas.
Something Tesla has not even commence.
Based on Tesla’s current progress trajectory, Roy believes it will take at least 3 to 5 years before Tesla is testing its robotaxis in those 5 metropolitan test areas, let alone approved for consumer use.
My viewpoints: (mine & mine only)
Loss of seasoned top executives during Tesla’s critical transition period is a valid concern, expressed by concerned investors who have a stake in the company.
Now that Mr CEO had made all those “extremely challenging” promises in order to turn adversity into “opportunities” - its ability to execute on these ambitious plans, (1) Model 2 production, (2) FSD collaboration, and (3) robotaxi rollout, will be closely watched.
With the latest & newest NHTSA investigation, Tesla will require a miracle to deliver its autopilot and FSD software and “on time”.
Investors will be keen to see how the company navigates these changes and maintains its trajectory in the competitive electric vehicle market as competitors ( $Ford(F)$ , $General Motors(GM)$ , $Stellantis NV(STLA)$ ) get comfortable with their EV manufacturing.
Does the exodus of Tesla senior staff reminds you of Elon Musk’s axe of Twitter C-suites? Is history repeating itself ?
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Do you think it is a valid concern when many senior executives resigned at such close intervals?
Do you think Tesla will be able to deliver on the 3 promises punctually, something it is not known for?
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my thoughts only.
Cheers JC [ShakeHands]
Well too early to say other things. Go back to 200 first….
Tesla turns to deep discounts as inventory piles up... bad sign.
Pls help to "Re-post". Tks! Rating is important (to me).
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