Tesla's long-time CTO, JB Straubel, stepping down
- Author: Darren Santiago Jul 28, 2019,
Jul 28, 2019, 0:58
Tesla (NASDAQ:TSLA) shares dove as much as 15% after a worse-than-expected loss and yet another major management change cast fresh doubts on the EV maker's future.
Instead, CEO Elon Musk said during Tesla's second-quarter investor conference call on Wednesday that Straubel will instead enter a "senior advisor" role. In January this year, Musk laid the foundation of Tesla Gigafactory in Shanghai - the first-ever outside the U.S. - that is expected to produce 500,000 electric vehicles per year and double the production capacity.
More surprisingly, however, Tesla didn't decide where to manufacture the electric crossover until the latest quarterly results were published.
The adjusted net loss per share came in at $1.12, a 63% improvement from the prior-year period's $3.06 adjusted loss per share.
According to Tesla, the Model 3 was once again the best-selling premium vehicle in the US.
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While Tesla posted profits in the second half of a year ago, 2019 has been turbulent.
Despite selling more cars than ever, Tesla is still struggling to prove it is profitable and has suffered a series of high-profile exits.
Now, Musk is busy in finalizing for European Gigafactory before the end of the year. Straubel is being replaced by one of his subordinates, Drew Baglino. On average, analysts were expecting a loss of $0.40. However, Tesla's stock dropped another 11% in extended trading. A portion of this amount invested in the new Tesla factory, which until the end of 2019 will open in Shanghai, the other part is going to start production of the Model Y, and Semi, as well as to expand the network of charging stations.
Musk said the company had grown to the point of "being self-funding", indicating he might not need another cash infusion following a record-setting capital raising earlier this year.
But despite improvements, at just over 158,000 cars shipped Tesla remains less than halfway to its target of 360,000 to 400,000 deliveries in 2019, according to the Times, and the continued phaseout of a USA federal electric vehicle tax credit (down from $US3750 ($5374) to $US1875 ($2687) as of July and disappearing entirely at the end of the year) may hurt demand.
"Straubel has been at the forefront of the company's technology leadership, which we believe will increasingly be called into question as competitors catch up", Cowen analysts said. The company reported a $408 million loss during the three months ending in June, resulting in Tesla shares falling more than 10 percent shortly after the earnings report was released on Wednesday.