Why Tesla may have found the best man in the popular and ethically straightforward Vaibhav Taneja

Vaibhav Taneja, CFO, Tesla

Tesla has a new CFO. And this time again, he is of Indian origin.

Vaibhav Taneja, a graduate from Delhi University who spent 16 years at global consultancy firm PwC before moving to Tesla, was appointed as the automaker’s CFO on August 7. Deepak Ahuja, the Mumbai-born executive, had earlier served as Tesla’s CFO.

Taneja, a chartered accountant, has already served as Tesla’s chief accounting officer after joining the automaker in 2017. Taneja replaced Tesla veteran and a widely speculated successor to founder Elon Musk, Zachary Kirkhorn, who will stay on until the end of the year to ensure a smooth transition. “This morning Tesla announced that I’ve stepped down from my role as chief financial officer, succeeded by our chief accounting officer, Vaibhav Taneja,” Kirkhorn said in a LinkedIn post. “Being a part of this company is a special experience and I’m extremely proud of the work we’ve done together since I joined over 13 years ago.”

Before joining Tesla, Taneja, a commerce graduate, had worked in finance and accounting roles at SolarCity Corporation, a US-based solar panel developer acquired by Tesla in 2016. Before that, the 45-year-old had a 16-year-stint at PwC in both the US and India, which included managing the audits of companies across telecom, entertainment, media, and financial services in India. In 2021, Taneja was also appointed as a director for Tesla's Indian arm, Tesla India Motors and Energy Private Limited.

“Right from the time he joined PwC, there was a sense of purpose in him,” Deepak Kapoor, former chairman of PwC India, tells Forbes India. Kapoor had hired Taneja for his first job as an assistant manager at PwC and remembers him as someone who “sticks out in your memory”. “Through the 40 years or so at the firm, you tend to categorise people in different brackets, and Vaibhav was always among the top stars, the three or four that stand out.”

Taneja’s appointment as CFO comes at a time when Musk has laid out elaborate plans to ramp up manufacturing in its attempt to ride on the head start in the global electrification journey. The world’s wealthiest man has already announced India as his next stop to manufacture vehicles.

Much of that’s because the American automaker quickly wants to take advantage of its position as a cost leader in the global electrification journey, even as it struggles with supply constraints. Then there is the growing competition from incumbents such as Mercedes, BMW, and Volkswagen, which have been accelerating their electric journey, and in the process drawing away potential buyers from Tesla, which had for long been seen as the archetype of electric vehicles (EV) globally.

“What Vaibhav brings to the table, apart from his sense of purpose is his excellent people skills,” adds Kapoor. “He is very social, is an excellent accountant, and on ethics is very straightforward. His standards are very high.” Kapoor also recounts how Taneja was quite clear early on about going to work with a multinational, even though he could have made partner at PwC.

Taneja, meanwhile, is among a handful of Indian-born executives who have made it to the top at the world’s most valuable auto brand. In 2020, Jay Vijayan, a former CIO of Tesla, who worked closely with Musk built Tekion, a cloud-based subscription service for automakers, into a unicorn after his company raised $150 million in a Series C financing round.

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Tesla’s big plans

Taneja’s appointment as CFO also comes at a time when Tesla is firming up its India plans.

“I am confident that Tesla will be in India and will do so as soon as humanly possible,” Musk had said after his meeting with Indian Prime Minister Narendra Modi in June. “I would like to thank the prime minister for his support and hopefully we will be able to announce something in the not-so-distant future.”

Musk’s announcement comes a month after senior officials at Tesla flew down to New Delhi to meet with the government to work out plans for setting up operations in India. "We do not want to jump the gun on an announcement but I think it is quite likely that it will be a significant investment in our relationship with India," Musk said.

Tesla currently has six manufacturing facilities across the globe, with four in the US. It also has two gigafactories—facilities to manufacture cars and batteries—in Shanghai and Berlin. In March, the company confirmed it has identified Mexico to set up another gigafactory where it intends to produce a next-generation vehicle. The company plans to sell 20 million EVs a year in 2030 from about 1.3 million currently, which would mean a significant ramp-up in assembly plants and battery production.

Musk himself has been advocating a sub-$30,000 (Rs 24.5 lakh) EV since 2008, but even the cheapest of Teslas costs as much as $42,000 (Rs 34.5 lakh) in the US. In India, the company has reportedly laid out plans to make a sub $20,000 vehicle which would most likely be exported too. India has been offering production-linked incentives to make the country a manufacturing hub, especially as companies look to diversify their presence beyond China.

With supply chain constraints beginning to eat into Tesla’s timelines—Musk has said that the production of its Class 8 EV semi-truck would be dialled down due to supply chain issues—it also helps that India, with its low-cost operating structures, offers an alternative in ramping up production in addition to an economy that’s now expected to be the fastest growing large economy.

On June 14, Musk said that limitations in battery supply meant that the automaker would wait until 2024 to increase production of its electric trucks, which were first delivered in December 2022. "So, we're tentatively aiming for 50,000 units in 2024 for Tesla Semi in North America. And obviously, we'll expand beyond North America," Musk said on June 13.

Also read: Tesla's China hurdle in India

The rising competition and push towards EVs have meant that battery prices haven’t seen a gradual decline as was expected. In 2022, prices for lithium-ion (Li-ion) batteries rose by 7 percent, according to Bloomberg NEF. Automotive Li-ion battery demand increased by about 65 percent to 550 GWh in 2022, from about 330 GWh in 2021, according to the International Energy Agency. This, despite a 180 percent growth in lithium production compared to 2017.

The supply constraints for its trucks also come at a time when the company has cut prices for some of its Model Y and Model 3 vehicles in the US for the sixth time, in its attempt to take the fight to other automakers who have also been chasing electrification.

“In the current macroeconomic environment, we see this year as a unique opportunity for Tesla,” Tesla said in its quarterly earnings. “As many carmakers are working through challenges with the unit economics of their EV programmes, we aim to leverage our position as a cost leader. We are focussed on rapidly growing production, investments in autonomy and vehicle software, and remaining on track with our growth investments.”

Globally, automakers ranging from GM to BMW and Ford are expected to spend over $500 billion in developing all-electric vehicles from gasoline models over the next several years. GM had in 2021 said that the company would switch to an all-electric fleet by 2035 while Ford had announced plans to go all-electric in Europe by 2030. In India too, automakers from Tata to Mahindra have taken the plunge to develop their models as the government looks to have 30 percent of all vehicles sold in the country to be electric by 2030.

Tesla has a head start globally as the world looks to EVs. And Taneja will most certainly have his hands full.