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Tesla May Have Just Suffered Its Biggest Loss Ever

Industry News

Money is not the main reason this time.

Although Tesla suffered a loss for the second business quarter of this year, industry analysts and Elon Musk himself remain confident the automaker will still emerge in a position of strength by the end of the year by being sustainably profitable. That’s the good news. The not so good news is that Tesla’s Chief Technology Officer, JB Straubel, has announced his departure. Why is this such a big deal? Why did Tesla shares drop by 11.5 percent within hours of this announcement? Because Straubel was more than just Tesla’s CTO, but rather the heart and soul of many of the company’s core technologies. Straubel was one of Tesla’s co-founders and he’s been there since the beginning.

According to CNBC, his name is on a majority of the patents Tesla has filed, especially those related to batteries, safety, architecture, monitoring, and power management.

It was Straubel, who’s only 43 years old, who lobbied early on for Tesla’s supercharger strategy as opposed to battery-swapping. "JB is absolutely brilliant,” said Gene Berdichevsky, employee No. 7 at Tesla, in an email. "When I started, we did some of the technical development in his garage! I think there would be no Tesla as it is today without JB.” Straubel’s replacement will be Drew Baglino, who was recruited by Straubel back in 2006 and rose to the position of vice president of technology.

As for Elon Musk, he and Straubel go way back. They first met in 2003 when Straubel was trying to convince Musk to build an electric airplane. Because they both shared a passion for electric vehicles in general, Musk introduced Straubel to Tesla’s original founders, Martin Eberhard and Marc Tarpenning.

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Musk soon afterwards financially backed Tesla and joined its board in 2004, only one month after Straubel did. Musk became CEO in 2008. Even Musk owes Tesla’s success to Straubel, stating that "if we hadn’t had lunch in 2003, Tesla wouldn’t exist basically.” Straubel has long been fascinated with electric cars. One of his earliest pre-Tesla projects was converting a classic Porsche into an EV. During his time as a student at Stanford, he built and raced solar cars. Tesla’s Nevada-based Gigafactory was also one of Straubel’s many projects.

Will Tesla be fine without Straubel? Yes, but the fact that one of its most brilliant visionaries is gone, likely to pursue other projects, is a huge disappointment.

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