Head Of Tesla Motors Inc China To Step Down

Head Of Tesla Motors Inc China To Step Down
Blomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) said Friday its chief in China, Veronica Wu, has resigned without giving a reason for her departure.

Veronica Wu’s resignation comes less than 9 months after the electric car maker picked her as its head of China operations.

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Tom Zhu to replace Veronica Wu

Tesla Motors Inc (NASDAQ:TSLA) picked Veronica Wu to replace Kingston Chang who left in March. Veronica joined the electric car maker last December from Apple Inc. (NASDAQ:AAPL). Tesla started delivering its Model S sedans in the world’s biggest auto market in April, and anticipates building them in China within three to four years.

Tom Zhu, who now heads the electric carmaker’s charging network development in China, will assume operational leadership in the country. Zhu joined the carmaker in April and was a co-founder at Kaibo International, which provides project and construction management services.

The electric car maker has nine stores and service centers in six Chinese cities, and has tied up with companies including China Unicom and Soho China Ltd to build charging stations in the country.

In its emailed statement, the company said: “We remain confident in the Chinese market. We’ll continue to focus on providing an amazing experience to all customers, so that they can become our advocates and help us accelerate the transition to sustainable transportation.”

Tesla’s heavy reliance on China

Veronica Wu’s exit comes as China’s electric car market shows signs of growth, fueled by a series of incentive policies from the government. Tesla Motors Inc (NASDAQ:TSLA) is trying to boost its competitiveness by investing hundreds of millions of dollars in building charging outlets in China.

The electric car maker is relying heavily on China for growth this year and early next year until Model X hits the road. Tesla has received well over 20,000 pre-orders for the Model X, and that number is sure to increase further in coming months. However, Barclays’ analyst Brian A. Johnson believes the car marker’s momentum is now “out of favor” and the risk of “hockey stick growth” may hurt the stock in Q4.

Tesla Motors Inc (NASDAQ:TSLA) has been facing considerable obstacles installing chargers in China in order to provide adequate infrastructure for selling its cars. According to reports, the electric car maker’s initiatives are facing resistance from skeptics like property managers and workers. One of the problems faced by the carmaker in China is that nearly 74% of all urban housing is low-rise multi-family housing. This suggests that in China people rarely have family garages, and they share facilities or park on the street. This doesn’t work well with Tesla as home charging is typically required to keep cars on the road.

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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