Tesla Tech Chief's Exit is the latest high-profile exit

The departure of one of


TSLA -13.51%

's top executives, the latest in the series from the company, mark one of the highest profiled departures from the automotive manufacturer of 16 years of existence.

CEO Elon Musk said JB Straubel, who helped create the company and served as Tesla's technology manager since 2005, would leave the position and take on a senior advisory role. His responsibilities as technology manager are taken over by Drew Baglino, another long-time leader of Tesla, said Musk to analysts Wednesday.

Mr. Baglino had in recent weeks taken on a higher profile in Tesla, and triggered speculation among the company's observers that Mr. Straubel can leave.

Tesla shares fell on Thursday after the company reported a larger loss than expected in the second quarter. Tesla reiterated its earlier guidance that the company would deliver 360,000 to 400,000 cars this year, but warned it would emphasize expanding its production capacity and model setup to boost the bottom line.

"The soft gross margin profile will be a belly punch for bulls hoping for well-needed good news on this front," said Wedbush Securities analyst Daniel Ives. Tesla shares on Thursday dropped $ 37.68, or 1[ads1]4%, to $ 227.20.

The departure of the 43-year-old Mr. Straubel follows other high-profile departures at Tesla in recent years when the company struggled to bring its compact car Model 3 to the market.

In January, Tesla surprised the investors when another income statement announced that long-time CFO Deepak Ahuja leaves the company.

Straubel outwitted Martin Eberhard, another founder of Tesla, Mr. Eberhard drove Tesla in the early years, before being breathed out in 2007 and eventually replaced as managing nd director of Mr. Musk, who had helped finance the start-up.

Piper Jaffray analyst Alexander Potter called Straubel "probably the second – the most important person" at Tesla and said his retirement is likely to scare investors.

Gene Berdichevsky, an early Tesla employee who later co-founded a battery technology company called Sila Nanotechnologies Inc., said "there would be no Tesla as it is today without JB."

Mr Straubel made the decision to withdraw As the company matures into a phase that needs more operational focus while happily working on new projects, a person familiar with the situation said.

"I do not disappear and I just want to make sure that people understand that this is not a lack of trust in the company or team, "said Straubel to analysts.

Tesla has a long history of management turnover. Co-founder Marc Tarpenning left the Roadster production in 2008, Vice President of Vehicle Engineering Peter Rawlinson pulled off in front of the Model S production in 2012, and former engineer Doug Field stepped down as Model 3 was ramped up in 2018.

Tesla CEO Elon Musk said that 2019 would bring a rhyme similar electric car built in a new factory in China. But as WSJ's Tim Higgins reports, investors can lose confidence in that plan. Photo illustration: Laura Kammermann

That constant has been a small group of core leaders who have advised Mr. Musk. Mr. Straubel was in that circle.

Mr. Straubel was deeply involved in the development of the battery pack that ran the first Tesla vehicle, the two-seater Roadster. The battery architecture that the team designed, strung together thousands of battery cells and avoided overheating or firing, was one of Tesla's technological breakthroughs.

Mr. Straubel later helped develop Model S sedan, the company's bid to compete against mainstream luxury cars, and established the network of charging stations that Tesla was able to convince buyers that an electric car could be convenient for a return trip. He then worked with several battery projects for Tesla.

Mr. Musk praised Mr. Straubel during analysts' conversation, and credited him for "his fundamental role in creating and building Tesla."

Write to Tim Higgins at

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