Several Top Executives At Tesla Have Quit, With The Latest Leaving At The End Of Its Earnings Call

Martin Viecha announced on Tuesday that he will be resigning from his role after seven years. Martin was Tesla’s long-time vice president of investor relations and his exit is the third high-profile exit from the challenged carmaker in under two weeks.

Last week, senior vice president, Drew Baglino announced his resignation from the company, and in less than a week, Viecha has followed his lead, sparking questions about what could be going wrong in the company.

Executive Shake-Up At Tesla: Departures Of Baglino And Patel

Baglino was one of only four named executive officers at Tesla. He led the engineering and technology department for the car’s rechargeable batteries. 

He had been a part of the company for over 18 years and was quite popular amongst investors and analysts. Another top dog at the company, Rohan Patel, vice president of public policy and business development also announced that he will be parting ways with Tesla. 

Viecha’s Departure Amidst First-Quarter Earnings Uncertainty

Viecha’s comments came after the announcement of the company’s first-quarter earnings which is regarded as a crucial crossroads for the company after its worst quarter in four years by many. 

CEO, Elon Musk also wore a much more sober expression as he had to offer reassurances to investors on the future of Tesla. Many of those investors would have collaborated closely with Viecha, who announced his leaving in posts on Xand LinkedIn.

Viecha Announces Retirement from Tesla: Reflecting On Seven Years Of Service

“About a month ago, I spoke with Elon and [chief financial officer] Vaibhav [Taneja], to announce that I’m going to be retiring from the world of investor relations and moving on,” Viecha said in his post. “Working for Tesla for the past ~7 years has been the greatest privilege of my professional life.”

Viecha said he is leaving to “take a break and spend a lot of time with my family.”

Tesla’s Earnings Call: Stock Surges Amidst Departure Concerns

Tesla’s earnings call was a big encouragement for its investors, with the struggling stock climbing over 12% in after-hours trading. However, the departures have unsettled some Tesla investors, especially those critical of Musk. 

Viecha’s departure is particularly concerning as he had strong connections with Tesla’s investors, some of whom were puzzled by Musk’s actions.

Tesla Needed An “Adult In The Room” And Musk Delivered

Wedbush tech analyst Dan Ives said in an interview that Tesla needed an “adult in the room” and Musk rose to the occasion today. However, Ross Gerber warned that Ives and others shouldn’t judge just Musk’s performance on the call but also other signals from the company, including the executives’ exits.

“Dan, you’re discounting the end of the call with Martin resigning,” said Gerber, CEO of Gerber Kawasaki Wealth & Investment Management. “You and I have been working with Martin for a long time and he is the glue between management and shareholders and investors.”

Concerns Rise As Tesla Continues To Lose Top Executives During Critical Transition

However, according to Gerber, the sight of another top executive bidding farewell to the company, especially at such a crucial time in the company’s history could indicate a pattern.

Musk “continues to lose seasoned top executives during this really important transition and I find that to be concerning,” said Gerber. 

Less Talk, More Action

He agreed with Musk’s vision but hopes to see a better alignment between Musk’s talk about his vision and what’s actually happening at the carmaker.

“The monkey in the room is that there’s no demand for the vehicles, even if they flew,” said Gerber.

Revenue Drops 9%, New Affordable EV Models On The Horizon

In its first quarter report on Tuesday, Tesla announced a 9% drop in first-quarter revenue. The last time the company witnessed a decline in revenue was in 2012. The company also missed analysts’ estimates as the electric vehicle company rides out the ripple effects of ongoing price cuts.

CEO Elon Musk announced to the investors that the company is set to roll out new and affordable EV models and this could begin much sooner than earlier anticipated. As a result of the news, the company’s stock witnessed a jump in extended trading.

Tesla’s Revenue And Net Income Plummet: A Year-over-Year Comparison

The company’s revenue dropped from $23.33 billion about a year ago and from $25.17 in the fourth quarter of last year. Net income went from $1.13 billion, or 34 cents a share, to $2.51 billion, or 73 cents a share, a year ago, a whopping 55% drop.

Tesla experienced an even bigger decrease in sales compared to its last dip in 2020 when production was affected by the Covid-19 pandemic. Automotive revenue for Tesla fell by 13% from last year to $17.38 billion in the first three months of 2024.

Expect New Models By Late This Year Or Early 2025

Musk said on the call that by “early 2025, if not late this year” the company expects to start production of new models after previously expecting to begin in the second half of next year. 

Musk also praised Tesla’s investments in artificial intelligence infrastructure and said the company is in talks with “one major automaker” to license its driver assistance system, which is marketed in the U.S. as the Full Self-Driving, or FSD, option.

2024 Not Looking So Good, Tesla Says

In its shareholder deck, Tesla reaffirmed a not-so-good outlook for 2024, telling investors that “the volume growth rate may be notably lower than the growth rate achieved in 2023.”

Before the 13% jump after hours, Tesla shares were down more than 40% this year. This is the lowest they’ve been since January 2023, on concerns about weak deliveries, competition in China, and the company’s ongoing price cuts. 

A Drop In Vehicle Deliveries And Plans For New Affordable Models

Earlier this month, Tesla revealed an 8.5% drop in vehicle deliveries compared to last year’s first quarter. 

In their presentation, they mentioned speeding up the launch of “new vehicles, including more affordable models,” which can “be made on the same production lines” as their current lineup. 

Tesla’s Production Goals And Robotaxi Concept

Tesla aims to make full use of its current production capacity and achieve “more than 50% growth over 2023 production” before investing in new manufacturing lines. 

Tesla also showcased images of a robotaxi-based ride-hailing service but hasn’t delivered on Musk’s promise of a self-driving vehicle despite years of anticipation.