Manager head rolls

This is how experts assess Tesla’s strategy shift

With the departure of numerous managers, Tesla is once again becoming a bit more of an Elon Musk one-man show.

(Bild: AFP)

Tesla's latest strategic shift towards savings is accompanied by an exodus of managers. Only around a year ago, 16 top managers flanked Tesla boss Elon Musk on stage at the company's Investor Day. By demonstrating his "strong bench", the billionaire countered investor concerns that the world's most valuable car manufacturer was too much of a one-man show. Five of these managers have since left the US electric car pioneer.

According to industry experts, the top personnel appointments are partly due to the austerity measures Musk imposed on Tesla due to profit losses in the fiercely competitive e-car market. And they reflect the realigned strategy.

Charging infrastructure manager fired
Rebecca Tinucci, who headed up Tesla's charging team, was one of two women on stage at the Investor Day last March. The boss and around 500 employees from her team are among the latest departures, according to a report by The Information this week. The head of the new car program, Daniel Ho, also packed his bags. In addition, Rohan Patel, who is responsible for political relations, left and the former Obama official's team is being disbanded. "Hopefully these actions make it clear that we need to be absolutely tough on staff and cost reductions," Musk wrote in an email. Not all managers were taking the austerity measures seriously.

One of the missing managers was in charge of the charging team.

(Bild: Stephan Schätzl)

Tesla's charging station business is also a critical factor for other e-car manufacturers, as almost all competitors in the USA, including Germany, have agreed to adopt Tesla's charging standards over the course of the last year. This means that Mercedes and BMW drivers can also charge up at Tesla. On his social media platform X, Musk explained that Tesla wants to continue to expand the Supercharger network, only adding new locations at a slower pace and paying more attention to high capacity utilization during operating hours.

CFO and chief battery engineer fired
Also gone since the appearance in Texas are CFO Zach Kirkhorn and Drew Baglino, the chief battery engineer. The latter left as part of the wave of redundancies of ten percent of the 140,000-strong global workforce announced in April, which also affected a total of around 800 workers at Tesla's Grünheide plant in Germany. Baglino sweetened his departure by selling his share package for 181 million dollars. High-ranking drive technology manager Colin Campbell is also a former Tesla employee. The list goes on with US Head of Human Resources Allie Arebalo and Martin Viecha, Head of Investor Relations, who has had to explain his boss's volte-face to investors in recent years.

Experts on good corporate governance frown at the bloodletting. "Many departures in a short period of time indicate a problematic management style," said Charles Elson from the Weinberg Center for Corporate Governance at the University of Delaware. "You shouldn't lose so many people so quickly."

Many departures in a short period of time indicate a problematic management style.

Charles Elson, Weinberg Center for Corporate Governance

In the face of dwindling sales, profits and share price, Musk has reaffirmed his supremacy in the company - which is more important to some investors than the departure of executives. "Elon's not here and we have this turnover? That's very bad," said Gene Munster, managing partner of Deepwater Asset Management and Tesla investor. "If Elon is there, he's going to draw on talent to keep things going, so it really just comes down to Elon staying on board."

Major strategy changes expected
Fundamental strategy changes are on the horizon at Tesla, which naturally goes hand in hand with management restructuring. The future of the company lies in artificial intelligence and robotaxis and no longer just in car production, Musk said at the latest analyst conference. According to insiders, he shelved plans for a new, low-cost model series. Instead, existing platforms for low-cost models will be revised. This also means the end of the next, technically revolutionary step of casting the substructure of the car from a single component in the gigapress instead of the previous three - compared to the small-scale production of conventional car manufacturers using more than a hundred individual parts.

The governments in India and Mexico are likely to have winced at Tesla's announcement last week that it will only start building new factories when the existing production capacity of three million cars a year is fully utilized. According to analyst estimates, the car manufacturer will produce less than two million vehicles this year. Chief engineer Lars Moravy said that using the existing production lines was a major change in strategy. India's politicians were already set to celebrate a multi-billion dollar investment in a car factory after customs rules were changed at Musk's insistence. However, the Tesla boss turned down Prime Minister Narendra Modi at the last minute, which caused outrage in the Indian media last week. It is therefore fitting that one of the people who played an important role in this is leaving in the person of policy chief Patel.

Some analysts also see good things in the turmoil that is currently taking place in the Tesla boardroom. "If you believe the narrative that Tesla is basically an AI company, that's not a cause for concern," says K.C. Boyce of data analytics and consulting firm Escalent. "It fits with the idea of right-sizing and resourcing the company to deliver on the promise of the fully self-driving car and robotaxi."