Investor's Corner
Tesla CFO Deepak Ahuja is retiring again, hands over reigns to Zach Kirkhorn
In what could very well be the most surprising update in Tesla’s recently held Q4 2018 earnings call, longtime CFO Deepak Ahuja announced his retirement from the company. He would be succeeded by Zach Kirkhorn, the electric car maker’s vice president of finance, who has been with Tesla since the days of the original Roadster.
The announcement of the legendary CFO’s retirement was related near the end of the Q4 earnings call, with CEO Elon Musk expressing his thanks to the executive for his contributions to the company. Deepak, for his part, also thanked Tesla, stating that the company has arguably the best team in the industry. Despite leaving his post, Deepak is set to play a role in the company nonetheless, with Elon Musk stating that he would continue to serve as a “senior adviser” for “probably years to come.”
This is not to say that Deepak would be leaving Tesla in dire straits. The company has posted its second profitable quarter in a row, and Model 3 production has reached a point where the vehicle could be delivered to international markets. During the earnings call, Deepak noted that he is optimistic about Zach taking over his post.
“I feel really good about Zach taking over. He’s proven his self over the years with many tough challenges he’s worked on,” he said.
Tesla’s incoming CFO echoed Deepak’s sentiments. During the recently held earnings call, Zach noted that he is looking forward to scaling the company’s energy business.
“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,” he said.
This is not the first time Deepak Ahuja left Tesla. Back in 2015, the finance veteran announced his departure from the electric car maker. He was replaced by Jason Wheeler, Google’s former VP of Finance, who later departed from his CFO post at Tesla to pursue interests in the public sector. Following Wheeler’s departure, Deepak came out of retirement to fill Tesla’s CFO position full-time.
Deepak Ahuja is among Tesla’s key executives, being with the company since its early days. Prior to his employment at the electric car maker in 2008, he held a rather comfortable position in Ford. In a presentation to graduates at Northwestern University, his alma mater, Deepak pointed out that it was Elon Musk’s vision that ultimately encouraged him to join Tesla.
“Meeting Elon Musk, and understanding his vision of Tesla, was a game-changing moment in my life. I felt passion about this opportunity in a way that I hadn’t felt before,” he said.
As Tesla’s first CFO, he was among the key executives that helped the company navigate through its financial troubles in 2008. He ultimately helped Tesla through its successful IPO as well. Ultimately, Deepak Ahuja’s contributions to the company are notable, and it would not be a stretch to state that Tesla would not be where it is today without the legendary CFO’s work.
Together with Tesla’s Q4 2018 results, Deepak’s departure appears to have been received negatively by Wall Street. As of writing, Tesla stock (NASDAQ:TSLA) is down 4.68%, trading at $294.80.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
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