Model 3

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Tesla
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Sedan

Citing insiders, Chinese publication PingWest reports that Tesla CEO Elon Musk has chosen to name Tom Zhu Xiaotong as his successor in charge of the EV maker's global operations. Zhu is currently the President of Tesla China and has led the automaker to numerous successes in his time in charge. He joined Tesla in April 2014 as the director of the company's Supercharger program in the country, being promoted to the roles of Global Vice President and President of China after Veronica Wu left the company. Zhu oversaw the introduction of Tesla Service Centers, the arrival of new vehicles in China, and the development of Tesla Gigafactory Shanghai, which is now the company's primary export hub.

The news seems very believable. Just last month, Tesla director James Murdoch testified in court that Musk had identified a potential candidate to take over as CEO, while former board member Antonio Gracias testified that there were discussions at the company to find an "administrative CEO" that can oversee areas like sales, finance, and HR. This would help Musk "focus his time as chief product officer, which is his most vital function."

Musk has often been reported to have a disdain for the administrative requirements of the CEO role and doesn't actually see himself as one.

"I tried not to be CEO of Tesla, but I had to or it would die," said Musk. "I rather hate being a boss. I'm an engineer."

Meanwhile, a separate report from Bloomberg, again citing unnamed insider sources, claims that Musk has brought Zhu to Texas to run Tesla's Gigafactory there. The two reports could be related, as it would be beneficial for Zhu to learn about how things are done in the US before taking over as the big boss. This could also be a test of Zhu's capabilities, as Giga Texas has been described by Musk as a "money furnace."

Tesla could well benefit from a change in leadership. The automaker's share price has plummeted since Musk took over as CEO of Twitter, which he also intends to pass on to someone else in time. Musk is also in charge of SpaceX, among other companies, and no business benefits from such a divided focus.

We look forward to seeing how this plays out. If Musk can get others to handle the day-to-day running of Twitter and Tesla, he can focus on innovating and creating, as is his wont. This could accelerate the progress of a cheaper Tesla to slot in below the Model 3, something that has been teased for some time but has not yet materialized. More importantly for shareholders of his numerous companies, such a move would create stability for those companies' share prices. And with an industry expert in charge of Tesla who likely won't use social media as his personal soapbox, the company could well reach the heights it once did in terms of everything from value to social appeal to technology.