Drew Baglino is cashing out. The former senior vice president in charge of powertrain engineering at Tesla liquidated virtually his entire stake in the company – worth $181 million – just days after leaving the company last week.
In a regulatory disclosure, Tesla said Baglino has exercised the majority of his vested stock options, which have been converted into 1.14 million shares. He promptly dumped them on the market on Wednesday, the day after Tesla filed its 10-Q statement, which was the earliest possible opportunity for a business insider.
The options were about to expire 90 days after his departure, but Baglino could have chosen to retain some of his shares.
Once a leading candidate to replace Elon Musk on the Tesla throne, Baglino helped build the company’s lucrative commercial energy storage business, led by its industrial-scale Megapack battery, now perhaps the manufactured product with the highest margin.
But the solar-roof business he runs has dwindled to little more than a rounding error, and Tesla this quarter stopped publishing deployment figures, the only reported metric. Worse still, the 4680 cell, once the foundational pillar that would ensure Tesla’s cost competitiveness against its rivals, has repeatedly run into production issues and is now effectively no longer the core of its stock story.
“I don’t think it’s super important, at least not in the near term,” Musk told investors on Tuesday, arguing that Battery Day’s biggest revelation of 2020 was really little more than a hedge against the rising cost of getting involved of cells from battery suppliers.
“We created the cell program to address the crazy increase in our suppliers’ costs per kilowatt hour due to massive orders from every automaker on earth,” Musk continued. Now that cell manufacturers have excess capacity after incumbents like Ford have withdrawn from the EV market, prices are a lot more favorable for Tesla.
Baron is confident in a new strategy change for cheap EV
Baglino’s stock sale coincided with veteran Tesla investor Ron Baron’s hopeful optimism on CNBC on Thursday. The head of Baron Capital, whose largest position is in Tesla, called the bottom for the stock.
“It’s going to increase enormously. Now it has bottomed out,” he said, arguing that the new strategy change for its low-cost car would plug a gaping 1.2 million unit gap in a production network capable of building 3 million cars annually – all without the need for additional investments. .
But his frustration with the stock, which is up just 1% since this time last year and down overall since the start of 2021, was palpable.
“It’s not that exciting to be up 1% in a year when the market is so strong,” he said. “I look around all the time and see everyone getting rich – and I’m not poor, but I haven’t made much progress in the last three years, so that’s why I think it’s like a rubber band, I’m going to catch up again. ”