Tesla’s Potential Musk Successor Departs Abruptly After 13 Years

Zachary Kirkhorn, Tesla Inc.’s Chief Financial Officer, resigned after 13 years with the electric vehicle manufacturer. This unexpected change in leadership raises additional concerns about succession in Elon Musk’s business.

One of only four executive officers and a well-known spokesperson for the business among shareholders, Kirkhorn, resigned from his position on August 4, the company announced in a regulatory statement on Monday. He will stay on until the end of the year in an undetermined place “to support a seamless transition.”

According to Tesla, Chief Accounting Officer Vaibhav Taneja also assumed the responsibilities of CFO. Before taking the helm as accounting head in 2019, Taneja, 45, held many positions at the EV manufacturer. In the US and India, he had previously worked for PricewaterhouseCoopers.

In New York, Tesla shares decreased by 1%. This year alone, the stock price has more than doubled.

Kirkhorn resigns as Tesla constructs a new factory in Mexico and is ready to launch its Cybertruck pickup to compete in the congested EV market. Tesla has reduced costs across its entire lineup to maintain its electric vehicle market dominance.

“He’s done a 13-year tour of duty for Elon, which is like working 50 years for anyone else,” said Gene Munster, managing partner of Deepwater Asset Management. “The fact that he’s sticking around until the end of the year bodes well for the transition.”

Nonetheless, Kirkhorn’s resignation, considered a strong contender to succeed Musk as CEO, raises questions about Tesla’s leadership. It also immediately raises Taneja’s stature, who was not one of the 16 executives brought on stage with Musk during an investor meeting in March.

In a tweet, Musk congratulated Kirkhorn and recognized that his tenure had not been simple. He didn’t offer any hints as to what the departing executive might be doing next.

Kirkhorn joined Tesla in 2010 as a senior financial analyst and progressed through five promotions before being appointed CFO at 34 in early 2019. Before his tenure, Tesla experienced continuous losses, occasionally depleting over $1 billion in cash per quarter. 

Since then, the company has maintained a profit and paid off nearly $10 billion in debt in the last three years, aiding in acquiring investment-grade ratings. Additionally, in December 2020, it entered the S&P 500 Index. 

Kirkhorn, a University of Pennsylvania alumnus, assisted Deepak Ahuja and Jason Wheeler, the CFOs who came before him. He spoke extensively during Tesla’s quarterly earnings calls, and investors praised him for controlling costs. He frequently discussed how software’s recurring revenue would take on more importance in the future.

Kirkhorn, a graduate of the University of Pennsylvania, worked under his predecessors as CFO, Deepak Ahuja, and Jason Wheeler. He spoke at length on Tesla’s quarterly earnings calls and was well-regarded by investors for reining in costs. He regularly discussed how recurring revenue from software would play an increasing role in the future.

“Zach did a great job expanding margins,” said Munster. “Usually, when companies scale up production, their margins come under pressure. He threaded the needle, and that’s a hard thing to do.”

According to information from Bloomberg, Kirkhorn had 197,540 shares last month. This ownership was worth roughly $49 million. Recently, he sold shares worth $1 million.

“Being a part of this company is a special experience, and I’m extremely proud of the work we’ve done together,” Kirkhorn wrote Monday on LinkedIn. “I also want to thank Elon for his leadership and optimism, which has inspired so many people.”

On earnings calls, Kirkhorn was a calm, collected presence in sharp contrast to Musk’s famed bombast.

Speaking on Monday with Bloomberg Television, Cathie Wood, CEO and Chief Investment Officer of Ark Investment Management, expressed her sentiment about Kirkhorn’s departure, acknowledging that Taneja is fitting to assume the CFO role.

Wood said of Kirkhorn and Taneja, “We will miss him, but his successor has been at Tesla right underneath him since 2018.” He gave his successor good training.

The biggest individual investor in Ark’s flagship Ark Innovation ETF is Tesla. According to statistics gathered by Bloomberg, it contributes to roughly 11% of the fund’s net asset value.

Commencing in early 2021, roughly a month following Tesla’s announcement of a $1.5 billion Bitcoin investment, the CEO included “Master of Coin” to his job title. The ironic moniker was given to Musk when he became known as the “Technoking of Tesla.”

“Master of Coin” was not included as one of Taneja’s responsibilities as the new CFO in Monday’s filing.