Elon Musk’s no-nonsense finance chief tallies profit surge at Tesla

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Turning point
Several former colleagues and multi-year investors who know Kirkhorn said he is deeply committed to Tesla’s clean energy mission. They describe him as being very close to Tesla’s products, mindful of engineering and manufacturing as well as finance. On earnings calls, he talks in great detail about Tesla’s other revenue streams, from the sale of regulatory credits to what the company terms “Full Self Driving” software and future insurance products.

“The auto business is capital intensive and under Zach, Tesla has been more capital efficient,” said Dick Amacher, a former engineer and product planner at General Motors who says he owns two Tesla models and stock in the company. “A finance leader is supposed to provide guidance for future strategy, and the results speak for themselves.”

The first half of 2019 was marred by Musk’s sudden decision to close stores — a move he walked back days later — but one that shook Tesla’s sales staff and puzzled shareholders. A bullish Wall Street broker rued the carmaker’s sliding stock price as “humbling” in June of that year, and two others warned about a deteriorating sales outlook. That unease was further stoked when veteran Chief Technology Officer J.B. Straubel unexpectedly departed in July.

“When Zach came on, he had the world’s worst job,” said Munster. “He had to deal with Elon and save a really complicated company.”

‘War chest’
By the third quarter of 2019, Tesla was showing progress toward improving its balance sheet. In a key turning point, the automaker reported the first profit in almost a year, beating analysts’ expectations for a loss, and stunned close observers with news the Model Y crossover would launch months earlier than expected — a big deal for a company known for blowing deadlines.

“We are quickly turning the corner for our next phase of growth, and our financial health continues to strengthen,” Kirkhorn told analysts on an October 2019 earnings call. “We remain focused on reducing cost, which enables rapid investments in future programs and growth.”

Tesla’s $3.7 billion in cash on hand at the end of 2018 ballooned to $14.5 billion at the end of the third quarter of 2020, the most recent figure available. Musk recently called that a “war chest.” Tesla will be spending some of that money on global expansion, with new auto and battery plants under construction in Austin, Texas, and Berlin.

Kirkhorn has a Twitter account, but his tweets are protected. When Tesla reported its delivery totals earlier this month, he shared the release on LinkedIn.

“Half a million cars in 2020! Congratulations to the Tesla team, our new customers and those who support our journey,” he wrote in the post. “Looking forward to another exciting year.”

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