Shares of Tesla (TSLA) dropped in morning trading following reports that the company's general counsel is leaving after just two months in the role. The departure of Dane Butswinkas comes just weeks after the company's chief financial officer announced his surprise retirement.
GENERAL COUNSEL TO DEPART: Dane Butswinkas, Tesla's general counsel, is leaving the company after just two months to return to his law firm Williams & Connolly, where he had spent almost 30 years before being named as the automaker's general counsel in December, The Wall Street Journal's Tim Higgins and Rebecca Ballhaus reported. Butswinkas said in a statement he looks forward to returning to Washington to continue his work with Tesla in an outside counsel role, as in the past. According to people familiar with the matter, Butswinkas found that Tesla "wasn't the right cultural fit." Vice President of Legal Jonathan Chang will become Tesla's new top lawyer, according to the report.
At the end of January, Tesla announced the surprise departure of its CFO. A the time, the company said Deepak Ahuja will be replaced by Zach Kirkhorn, a vice president of finance. Ahuja will retire in the "coming months" but will remain an advisor to Tesla, Tesla Chief Executive Officer Elon Musk said on the company's recent earnings conference call. This marks the second time Ahuja has resigned from the company, having left the first time in 2017. He rejoined Tesla in 2017, replacing then-CFO Jason Wheeler, who abruptly resigned. Other long-time veterans have resigned in the past six months, including Charles Mwangi, a senior director of engineering, and one of Tesla’s first-ever sales hires, Jeremy Snyder, who left his role as head of global business development there in August. More than 50 senior executives have left Tesla in the past two years, including heads of sales, engineering, human resources and communications, according to The Wall Street Journal. In September, Tesla’s accounting chief, Dave Morton, left the company after only a few weeks, citing the intense pressure and scrutiny of the company.
WHAT'S NOTABLE: The news of the general counsel's departure comes just hours after Elon Musk tweeted that the company will make roughly 500,000 cars in 2019 cars after making zero cars in 2011. He later clarified via Twitter that "Tesla made 0 cars in 2011, but will make around 500k in 2019...Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k."
Separately, in a podcast interview with ARK Invest, Musk doubled down on a claim he made about how quickly Tesla vehicles will be able to drive themselves. Musk said he is "certain" that Tesla vehicles will be able to operate without any driver intervention by the end of this year, pending regulatory approval. Musk suggested the update would still require the driver to pay attention to the road, but estimated that Tesla vehicles will be capable of driving without any attention from the driver by the end of next year.
Musk said in a memo to employees posted on the company's website earlier this month that the carmaker is cutting its full-time staff workforce by 7% as it increases production of the Model 3. Musk said Tesla is facing a "very difficult" road ahead, and that it has always faced "significant challenges -- but it is the reality we face" in its quest to build affordable clean energy products. The latest layoffs follow a workforce reduction of 9% in June 2017 as the company looked to cut costs and increase production of the Model 3 after months of delays.
ANALYST COMMENTARY: Loop Ventures' Gene Munster told CNBC's Squawk Box on Wednesday morning that his first thought on the departure of Butswinkas was "Oh no, here we go again." As a Tesla supporter, Munster said that the company "can't catch a break," but believes it is "highly unlikely" something "sinister" is going on. Instead, Munster said he sees the departure as further evidence that Musk is a "difficult person to work with." Musk is "a one in a billion type of person," Munster said, adding that "This is yet further evidence. And I think that is the biggest challenge that the company has -- retaining top talent." He still believes Tesla is going to change the world, telling CNBC that he is "still a believer, despite all the issues."
Commenting on Musk's comments to ARK Invest, Munster said Tesla is "not going to have autonomy" by the end of the year.
PRICE ACTION: In morning trading, shares of Tesla are off earlier lows, but are still down 0.5% to $304.38.
Keywords: electric car, automaker, Elon Musk, Model 3, job cuts, executive departure