Tesla Inc. TSLA shares came under selling pressure on Thursday after board member word got around that a succession plan for CEO Elon Musk is in the works. Tesla bulls dismissed the development as "good corporate governance" and said a change at the helm may not happen any time soon. Specifically, Loup Funds Managing Partner Gene Munster said a new CEO announcement could be two to three years away.
The venture capitalist on Thursday put forward a list of potential replacements for Musk, taking into account both internal and external candidates. The list has been arranged in the order of probability, he added.
1. Herbert Deiss: The former CEO of German automaker Volkswagen AG VWAGY, Deiss is the most probable successor from the list of seven candidates, Munster said. Two things working in his favor are his quest toward rapid electrification even while he was at the German automaker, and the respect he commands from Musk.
2. J.B. Straubel: Straubel, the CEO and founder of Redwood Materials and co-founder of Tesla, is strong when it comes to batteries — an important component of electric vehicles — Munster said. Additionally, he has a “level-headed business approach and a steady-handed personality” — characteristic traits that appeal to investors, Munster added.
Munster brought up the possibility of Tesla acquiring Redwood and Straubel taking over as CEO. Despite leaving Tesla, he serves as an advisor to the EV maker and remains on favorable terms with Musk, the Loup Funds co-founder said.
3. Drew Baglino: Baglino has been with Tesla for 16 years and is currently serving as SVP of Powertrain and Energy Engineering, Munster said. Baglino also serves on Tesla’s board.
4. Vineet Mehta: Another Tesla veteran having spent a decade-and-a-half at Tesla, Mehta currently is the director of battery technology and powertrain architecture.
5. Alexander Wojcicki: Wojcicki is the manager of propulsion at SpaceX for the past 12 years and has, in the past, helped share talent between SpaceX and Tesla teams to solve technical problems, Munster said.
6. Lars Moravy: A Tesla executive for 12 years, Moravy currently serves as VP of vehicle engineering and had previously worked as design engineer at Honda Motor Company’s HMC R&D unit.
7. Eddy Cue: Cue, Apple Inc.’s AAPL SVP, Services, was also mentioned by Munster as a potential successor, given he knows a lot about cars by virtue of his role as director of Ferrari N.V.’s RACE board. But it’s less likely that Cue would want the headache of running the show, Munster added.
Unlikely Candidates: Munster said Tesla is unlikely to accommodate Rivian Automotive Inc.’s RIVN RJ. Scaringe, Ford Motor Company’s F Douglas Field, Amazon Inc. AMZN founder Jeff Bezos and Lucid Group Inc.’s LCID Peter Rawlinson.
Musk is likely to see Scaringe and Rawlinson as heading companies that are direct competitors to Tesla, and with Field, Ford may not want to retain him even with a pay rise, the fund manager said. He also said the SpaceX-Blue Origin conflict is too much to overcome for considering Bezos for the post.
Even if Musk relinquishes the CEO role, he will stay with the company long-term in his self-proclaimed role of “Technoking," Munster said.
"So long as Musk is leading Tesla’s product vision, investors will likely remain supportive of the company," he added.
Price Action: Tesla closed Thursday’s session down 2.01% at $183.17, according to Benzinga Pro data.
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