Dive Brief:
- Tesla’s Chief Accounting Officer Vaibhav Taneja is taking over as CFO, according to a regulatory filing dated August 4.
- Taneja is replacing Zachary Kirkhorn, who served as Tesla’s CFO for the past four years. In 2021 the titles of Tesla CEO Elon Musk and Kirkhorn were changed to Technoking of Tesla and “Master of Coin,” respectively, though the executives retained their CEO and CFO positions, respectively, according to a company filing with the Securities and Exchange Commission.
- The surprising announcement comes as Tesla faces a class-action lawsuit for falsifying range estimates and shrinking margins from price cuts as a result of growing competition in the electric vehicle segment.
Dive Insight:
Upheaval continues at Tesla as the company faces lawsuits and greater scrutiny.
Kirkhorn worked for Tesla for the past 13 years before being named CFO four years ago. He will remain at the company until the end of the year in order to “support a seamless transition,” according to Tesla’s regulatory filing.
Tesla board members previously discussed Kirkhorn as a possible successor to Elon Musk as CEO, according to the Wall Street Journal.
No reasons were given for his resignation.
“This morning Tesla announced that I’ve stepped down from my role as Chief Financial Officer, succeeded by our Chief Accounting Officer, Vaibhav Taneja,” Kirkhorn wrote in a post on LinkedIn. “As I shift my responsibilities to support this transition, I want to thank the talented, passionate, and hard-working employees at Tesla, who have accomplished things many thought not possible.”
Kirkhorn joined Tesla in 2010 as a senior financial analyst, according to his LinkedIn profile. He was eventually promoted to vice president of finance in December 2018 before being appointed Tesla CFO in March 2019.
Taneja has served as Tesla’s chief accounting officer since March 2019.
Tesla is one of the world’s most valuable companies with a market cap of more than $700 billion, as of press time. The company reported $24.9 billion in revenue in Q2, a 47% year-over-year increase.
The automaker delivered 466,140 vehicles in Q2, a YoY increase of 83% compared to 254,695 vehicles a year ago. It was the highest quarterly delivery number in the company’s history. Despite the record delivered, Tesla’s profits margins are declining.
Recent price cuts amid growing competition and larger investments in new product development, including the upcoming Cybertruck, resulted in a decrease in the automaker’s operating margin from 11.4% to 9.6% compared to Q1. Last year, Tesla achieved a 16.8% operating margin, according to the Wall Street Journal.
Tesla is also facing a class-action lawsuit in California after Reuters reported on July 27 that the automaker falsified range estimates using a rigged algorithm that showed drivers longer distances than the vehicle could actually travel before the vehicle’s battery ran out of charge. The algorithm was first deployed about a decade ago without the knowledge of Tesla owners.
As of press time, Tesla’s stock price was down just over 2% on Monday to $248.62 after the announcement of Kirkhorn’s resignation.
