Race to make Model 3 puts pressure on Tesla
Analysts flag departures of executives as a risk in challenging year for auto firm
Tesla Inc. is losing key personnel as it races to bring the Model 3 — its most critical electric sedan yet — to market later this year.
Chief financial officer Jason Wheeler’s impending departure, announced just 15 months after he joined Tesla from Google, will be the latest in a raft of largely underthe-radar exits.
Former executives cited a range of reasons for their exits over the past year, including long hours in the rush to high-volume production, mission creep, and a tense culture that reflects their visionary but indefatigable chief executive officer, Elon Musk.
“Tesla looks like a company that is getting stretched to the limit,” said Dave Sullivan, an analyst at industry researcher AutoPacific Inc. “The pressure of getting out the Model 3 is getting to everybody, from the people on the factory floor to the people at the top.”
A Tesla spokesman in an emailed statement called attracting and retaining talent “one of our biggest assets” and said the company’s attrition rate was below average among technology companies.
Long hours and job-hopping are routine at tech companies in California’s Silicon Valley, and Palo Alto-based Tesla continues to make high-profile hires.
Even so, analysts have flagged the departures as a risk to what will be Tesla’s most challenging execution year in its short history. Musk plans to introduce the Model 3, is starting battery production at the Gigafactory and will integrate SolarCity, the recent acquisition that pushed Tesla’s global workforce to roughly 30,000 people.
Tesla noted among risk factors in its just-filed annual report that it needs to attract and retain skilled workers. This year, however, it added a new phrase to the boilerplate, saying the efforts are needed “especially to support our expansion plans and ramp to highvolume manufacture of vehicles.”
“Any time you’re going through a big change it’s important to have consistent management,” Colin Langan, a UBS analyst who has a sell rating on the stock, said. “Jason Wheeler was a big hire and he’s leaving, and there have been many other departures. If you’re putting out aggressive targets and the people aren’t there to meet them, it’s a problem.”
Wheeler, whose departure was first announced on last week’s quarterly earnings call, said he wants to pursue work in public policy and praised what he called the “A-team” at Tesla. Deepak Ahuja, the CFO who led Tesla from the brink of bankruptcy through its 2010 initial public offering and retired in 2015, will return in April for a second tour of duty.
Goldman Sachs Group Inc. this week downgraded Tesla to sell from neutral, with analyst David Tamberrino casting doubt on its ability to deliver the Model 3 on time. The Feb. 27 report contributed to the shares dropping about 11 per cent from their 19-month closing high of US$280.98 on Feb. 14.