Tesla has lost a couple of their major executives in the past week, foreshadowing a rapid decrease in stock price that has already started to creep up after concerns about the success of the Model 3. First, Tesla’s director of field performance engineering Matt Schwall left his position to join Waymo, a self-driving car technology startup owned by Alphabet.
It is unclear why Schwall left Tesla, but it could be due to the failure and subsequent suspension of Tesla’s self-driving testing. Tesla’s Model X crashed and killed its driver, who put it on autopilot for roughly six seconds before the SUV crashed into the median in Mountain View, California. Because of the fatal crash, the National Transportation Safety Board is investigating Tesla, which creates a massive obstacle for the electric-car manufacturer’s research and development of self-driving features. Plus, without Schwall, the investigation will be even tougher, as he dealt primarily with federal safety regulations. Without their director, Tesla faces an unprecedented learning curve that could significantly slow the growth of the company.
And just went Elon Musk and Co. thought they had their hands full, the senior vice president of engineering announced that he will be taking a leave of absence from Tesla. The company has stated that this is not a permanent exit and rather a temporary break so that the engineering chief can recharge, but even if that is true, the timing is far from ideal. Further, shareholders have been wary about the Model 3 and the number of units it can produce. Many people who have tested the car point out many designs, engineering, and manufacturing flaws within the car. In fact, a month ago, Tesla paused its production of the Model 3 to improve its manufacturing, which is not a good sign for a vehicle that is supposed to deliver within a year and a half of ordering.
Musk and his team claim that these shakeups in management are due to a flatter reorganization of the company, in which there will be less executives to improve communication across the board. According to Tesla, this transition will ensure that the production targets of the Model 3 will be met, but as of today, shareholders are seeing this as more of a repair than a preemptive measure. Moreover, Tesla stock has decreased by roughly 8% since the beginning of the year, from $320 per share to $292. On April 2nd, it reached as low as $252.48, its lowest figure in the past twelve months.
However, Tesla is far from doomed, and they are already taking measures to get the highly anticipated Model 3 back on track. Musk announced that the company is hosting a hackathon to solve some of the automation problems with the Model 3 – programmers will be invited to compete and fix the problems that Musk cannot crack. Musk believes that with these two robotic fixes, the company will be able to generate 5,000 units per week, instead of the current 2,000. Plus, even if the Model 3 does flop, that does not mean that Tesla is tanking. It still has yet to release the mysterious Model Y, a supposedly revolutionary design that will be unveiled in 2020.
Many people hold Elon Musk and Tesla to the highest standards because of their revolutionary creations and brilliant successes. However, every successful company has growing pains, and that’s what we’ve seen with the Model 3. These struggles may have slightly hindered Tesla’s reputation, but the electric-car company is due for a revamp, and that could come with the Model Y.
Featured image via Flickr/Peter Stevens