Besides declining sales, Tesla is facing another growing issue threatening the future of the company: executive retention.
What's happening?
Tesla has been struggling, partly because of CEO Elon Musk's political involvement, which has fueled vandalism and protests against the electric vehicle company.
But it has also lagged behind its competitors and, as the One Big Beautiful Bill has proposed cutting tax credits for EVs, stands to lose billions of dollars.
These issues have led to a "brain drain" at Tesla, according to The Atlantic. The magazine reported that a third of executives have left, been ousted, or resigned. Meanwhile, 14,000 employees were laid off last year, putting Tesla in a vulnerable position without as much power to fix itself.
Why is executive retention important?
The last time Tesla experienced major doubt, Musk reassured shareholders and consumers of the company's strength by emphasizing the leadership of its top executives. With many of them gone, its fate is increasingly in the hands of the divisive CEO.
While many might not be concerned with Tesla's success, it has a direct impact on owners of the EVs and prospective buyers. Tesla was a pioneer as one of the rare profitable EV companies, which made its vehicles are more affordable. Ultimately, this has made getting an EV more accessible, saving people money on gas and maintenance while reducing the amount of pollution being put out by drivers.
Tesla has also pushed the market to develop EVs to compete with it, leading to more options for consumers. Taking the pressure off other companies reduces the momentum for EVs to replace gas-powered cars.
What's being done about executive retention?
Tesla's plan to hire and keep top talent is unclear given Musk's propensity for slashing roles.
While the company is losing talent, those individuals have taken their skills and knowledge of EVs to other carmakers. Former head vehicle engineer Doug Field and former head of charging Rebecca Tinucci have moved on to Ford and Uber, respectively, managing EV projects at those companies.
"I think we'll see kind of a Tesla diaspora," Kristin Hull, the founder of Nia Impact Capital, an investment firm with a stake in Tesla, told The Atlantic. "The rest of the world is catching up. And I think that's also playing a part in why the talent is moving on."
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