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Tesla is undergoing a major reorganization that includes streamlining activities and functions to improve its performance, the company confirmed after the Wall Street Journal reported it, citing an internal email.
Reuters recalls that Elon Musk mentioned reorganization during Tesla’s Q1 earnings conference call, but at that time, Musk did not go into details. Now, Musk has said in the email to the Tesla staff that it was “flattening the management structure to improve communication,” and cutting activities that are not “not vital to the success of our mission.”
The reorganization announcement comes on the heels of news that a senior executive has left the company for its rival Alphabet’s Waymo, and a statement from Tesla that another executive—the senior vice president for engineering—has taken some time off.
Meanwhile, Tesla is being investigated by the transport safety authorities for a crash, during which, the driver said, the Autopilot feature was on. In a couple of recent tweets Musk downplayed the accident itself, emphasizing the fact that the only injury the Tesla driver had sustained was a broken ankle, when, he argued, it would have been much worse in any other car.
Investors are clearly getting tired of boisterous statements from Tesla and Musk as they are not yet seeing much substance in these. The company spared no assurance during the Q1 conference call that Model 3 production is ramping up faster, and the 5,000-a-week target will be hit by the end of June, but its shares have been falling as investors’ trust begins to wane.
Even the report of a record-high revenue did not quash concerns about the carmaker’s performance, especially against the background of several new vehicle releases including the Semi truck and a planned Model Y SUV. The majority of analysts and observers seem to be of the opinion that Tesla must first clear the problems around the models already in production, notably the Model 3, and then move on to other models.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.