The positive news in Tesla’s fourth-quarter results was overshadowed by the surprise announcement that CFO Deepak Ahuja is retiring two years after he rejoined the automaker.
One Wall Street analyst called Ahuja’s departure — which CEO Elon Musk announced at the end of an earnings call on Wednesday — a “significant loss of institutional knowledge,” while another warned it “may cause some uncertainty for investors” given the challenges facing Tesla.
“The unexpected departure of Deepak Ahuja is the latest in an exodus that has seen a wholesale turnover among senior management at the electric car maker,” The Financial Times said.
Ahuja will be replaced by vice president of finance Zach Kirkhorn, who joined Tesla in 2010 and obtained an MBA from Harvard Business School in 2013. Analyst Toni Sacconaghi of AB Bernstein questioned his experience, noting that he is “a first-time public company CFO, just six years removed from business school.”
In trading Thursday, Tesla shares were down 0.2% at $308.13 after initially tumbling 4.7%.
Before the Ahuja bombshell, Tesla reported that fourth-quarter revenue increased to $7.23 billion from $6.8 billion in the third quarter, beating analysts’ estimates of $7.07 billion as Model 3 sales rose. The company also made a profit for the second straight quarter, earning $1.93 per share compared to estimates of $2.08.
“Tesla faces questions about whether enough new Model 3 sedans can be sold to generate substantial profits,” the Los Angeles Times said.
A former Ford executive, Ahuja served as Tesla’s CFO for seven years before retiring in 2015. He was brought back two years later by Musk as the company prepared for the launch of the Model 3.
The recent management turnover at Tesla has also included Chief Accounting Officer Dave Morton, who was seen as Ahuja’s eventual replacement but resigned after less than a month. The company has also lost its head of finance and operations and its director of investment relations.
Ahuja gave his successor a vote of confidence. “I feel really good about Zach taking over,” he said. “He’s proven himself over the years with many tough challenges he’s worked on.”