Tesla CEO Elon Musk has announced that the electric car maker’s long-serving chief financial officer (CFO), Deepak Ahuja, is leaving the company after over a decade of service, CNBC reports.
Musk made the announcement towards the end of an earnings conference call. Tesla’s shares fell sharply by nearly 5% in after-hours trading.
This is not Ahuja’s first time to resign from the electric car maker. He first departed in 2015 only to rejoin two years later. This was to replace Jason Wheeler, who had abruptly resigned as the CFO.
Tesla’s CFO position will now be taken over by Zach Kirkhord who has been the finance vice president. Ahuja will not sever all ties to Tesla, however, as he has been offered a senior advisory role.
The incoming CFO previously worked as a business analyst at McKinsey & Co prior to joining Tesla. In a statement, Kirkhord expressed optimism about Tesla’s future:
“I’ve been deep in the operations of every major program of the company from Roadster to…scaling our energy business and more things to come. I feel we’re starting 2019 with a very strong financial foundation. We have enough cash to start new programs and develop new technologies.”
The heavily-indebted Tesla has experienced a high turnover in its finance team. Last year in September the company’s chief accounting officer, Dave Morton, resigned after less than a month. Morton who had been the CFO of data storage firm Seagate before joining Tesla cited indifference from Musk and other executives as the reason for quitting.
At the time, CNBC reported that Morton had clashed with Musk over the latter’s plans to take Tesla private. Morton had raised concerns over the plans and had proposed a different way of capitalizing the electric car firm. Incidentally, Morton had been expected to eventually take over the CFO position from Ahuja.
In the earnings call which Musk discussed prior to announcing Ahuja’s departure, Tesla reported its second consecutive quarterly profit ever. Overall it is the fourth quarter that Tesla is announcing a profit since the 2010 IPO.
Tesla’s earnings per share (EPS) were however below the expectation of analysts. The EPS came in at $1.93 while analysts had been expecting $2.20. Revenues generated in Q4 amounted to $7.23 billion against average estimates of $7.08 billion.
Tesla blamed the hit on earnings on various factors including higher import duties incurred on parts sourced from China. This follows the imposition of tariffs on various Chinese goods by the Trump administration.
Regarding its huge pile of debt, Tesla said it has enough cash to meet its obligations. The electric car maker has a $920 million convertible bond due on March 1.
Elon Musk image from Brendan Smialowski / AFP.
Last modified: July 2, 2020 7:29 PM UTC