Tesla's "Butler" Zuck: Cook, who is as low-key as Jobs, opposes Musk's purchase of Bitcoin

Key Points

① Elon Musk has always been regarded as the symbol of Tesla, and his focus is more on technology and engineering. Therefore, the electric car manufacturer needs a real behind-the-scenes helmsman, and he is Chief Financial Officer Zach Kirkhorn.

② Kirkhorn always keeps a low profile and doesn't like to be in the spotlight, but he knows how to get along with his boss Musk. He always acts as a bridge between Musk and employees and can meet his boss's various requirements almost perfectly.

③When Kirkhorn took over as CFO, Tesla's market value was about $50 billion, and now it has exceeded $500 billion. He helped Tesla achieve 15 consecutive quarters of profitability and accumulated $22 billion in reserve funds.

④ Although Tesla does not have a clear second-in-command, Kirkhorn handles many daily affairs as the chief operating officer. It is reported that the Tesla board of directors has discussed the possibility of Kirkhorn succeeding Musk as CEO.

Outside of electric car maker Tesla, Chief Financial Officer Zach Kirkhorn is virtually unknown. But within the company, he is widely praised for his ability to meet his boss's demands almost perfectly. Kirkhorn is seen as the real behind-the-scenes helm of Tesla, leading Tesla to continue to move forward rapidly, and he may even succeed Musk as Tesla's next CEO and step into the spotlight.

01He is highly regarded by Musk and never steals the limelight

When Kirkhorn became CFO four years ago, Tesla had been losing money for more than a decade. At the end of a quarterly analyst call in 2019, Tesla CEO Elon Musk said his new butler would be "Zach," but he didn't reveal his last name at the time. Most attendees were confused, and some had never even heard of the man.

Although Kirkhorn is well-known within the company, his promotion to CFO still surprised Wall Street, sending Tesla shares down about 5% in late trading.

Kirkhorn is now a staple on Tesla’s quarterly earnings calls, but few on Wall Street know him. In an industry where chief financial officers often chit-chat with analysts, many who cover Tesla say they have never had a one-on-one conversation with Kirkhorn.

Unlike his legendary boss, Kirkhorn’s day-to-day work doesn’t make headlines. For example, he worked on a project to replace third-party software with a tool developed by Tesla engineers to handle back-office tasks like managing recruiting. Such things don’t usually attract attention, but they are very important to Tesla’s development.

While Kirkhorn helped turn Tesla into a money-making machine, he hasn't done much to enhance his own reputation or image. In addition to Tesla, Musk also runs SpaceX and Twitter, where he has more than 137 million followers. Kirkhorn's account has only 63 followers, keeping him out of the public eye for the most part.

Musk relies heavily on Kirkhorn as he tries to build Tesla into the world's largest automaker. Tesla aims to sell 20 million electric vehicles a year by 2030, which would be equivalent to about a quarter of global new car sales. Last year, Tesla delivered 1.3 million electric vehicles, and its future challenges include a cooling electric vehicle market and more competitors.

When Kirkhorn took over as CFO, Tesla was valued at about $50 billion; today it is more than $500 billion. Tesla’s ratio of selling and administrative expenses to revenue, a measure of efficiency, fell to about 5% last year from 13% in 2018. Ford’s efficiency ratio was closer to 7% in 2022.

Kirkhorn is credited with helping to improve production efficiency, helping Tesla post 15 straight quarters of profitability and build a $22 billion war chest. The company's operating margin last year was 16.8%, well ahead of Detroit rivals. Tesla's profit margins have slipped recently amid a price war aimed at expanding market share.

People who have worked with Kirkhorn attribute his success to his determined, rigorous style and his ability to connect and communicate with Musk, two skills that dozens of former executives have struggled to master since Tesla’s founding. Former colleagues say Kirkhorn is happy to work behind the scenes to realize Musk’s vision.

“He never steals the show from Elon,” said Kurt Kelty, vice president of battery materials company Sila and former senior director of battery technology at Tesla.

02As an alumnus of Musk, is he expected to become Musk’s successor?

Kirkhorn and Musk both attended the University of Pennsylvania, 10 years apart. Kirkhorn studied engineering and economics, while Musk studied physics and economics, which gave them a common language. Some former employees said Kirkhorn's technical training and his MBA from Harvard Business School gave him the tools to help him achieve the company's goal of selling more cars by reducing production costs and pursuing efficiency.

The relationship between Kirkhorn, 38, and Musk, 51, mirrors that between Apple CEO Tim Cook and his visionary predecessor, the late Steve Jobs. While Musk revolutionized the auto industry with often risky, status quo-disrupting bets, Kirkhorn is known for fine-tuning business operations.

“For a CFO, predictability is everything,” said Steve West, a former Tesla board member. “You can’t do things that surprise people, and he never surprises people at any point.”

Former colleagues say Kirkhorn was known for his ability to navigate conversations with Musk, and by acting as a go-between for employees and Musk, who often fired people without warning, Kirkhorn helped win allies for his boss.

If Musk makes a seemingly unattainable request, Kirkhorn will break it down into smaller parts to accomplish.

In 2021, Musk said he had no succession plan at Tesla. But the billionaire took on a time-consuming management challenge by acquiring social media company Twitter last year, which has made investors more interested in his successor.

Several former executives said that while Tesla does not have a clear No. 2, Kirkhorn handles many day-to-day matters in the manner of a chief operating officer. A person familiar with the matter said that Tesla board members have discussed the possibility of Kirkhorn succeeding Musk as CEO.

Kirkhorn's name was again brought up by the board last year ahead of trial in a lawsuit over Musk's pay package. The lawsuit was filed by a shareholder who challenged Musk's pay agreement approved by Tesla's board in 2018. The deal is worth about $44 billion based on recent stock prices. The case has not yet been decided. The people also said some board members were skeptical that Musk would resign in the foreseeable future.

Tesla board chair Robin Denholm did not respond to a request for comment. But she acknowledged in January that "succession planning is an important topic for the board at all times." Musk himself did not respond to a request for comment.

03 Committed to cost management and driving Tesla's transformation

Kirkhorn was the host of a recent investor gathering where Tesla highlighted executives who worked under Musk. Kirkhorn used the opportunity to describe how Tesla has managed its spending problems and cut production costs for its Model 3 sedan, in part by building a more efficient supply chain.

“In this business, you live or die by your ability to manage costs,” he said in March at an event at Tesla’s factory outside Austin, Texas.

Kirkhorn is at the heart of Tesla’s transformation into a mass-market automaker with plans for a cheap car that costs half as much to produce as the Model 3. Tesla has not released a new passenger car in three years, a long time in the auto industry. The company’s cheapest model, the Model 3, starts at about $40,000 in the United States.

“As we improve affordability, the number of customers who have the opportunity to purchase our products will increase dramatically,” Kirkhorn said in the release.

04 Build cars while still studying and help build a battery factory

Kirkhorn grew up in the suburbs of Washington, D.C., and was the leader of the University of Pennsylvania's solar car team. The student team built a single-seat car called "Keystone" that was inspired by a flying saucer. During Kirkhorn's senior year, his team entered the car in the 2006 Tour de Sol, an open competition held by the Northeast Sustainable Energy Association. Keystone came in last place.

In a college project, Kirkhorn and a classmate redesigned a remote-controlled toy truck, adding a propeller system to make it amphibious. Their "amphibious robot" project won a $1,000 prize from the school.

“The classes can be a little boring at times, but when you look at the program proposals, it’s a really rewarding experience,” Kirkhorn said in the spring 2006 issue of Penn Engineering magazine. “I can see myself running a small business one day.”

After graduating from college, Kirkhorn worked briefly at consulting firm McKinsey before joining Tesla as a financial analyst before it went public in 2010. In the early days of Tesla, he drove a BMW E46 m3. JB Straubel, who served as Tesla's chief technology officer for more than a decade, said Kirkhorn showed an ability to solve complex problems.

“He’s left his biggest mark on probably the hundreds and thousands of hours of work he put in to make things better, and he continues to do that,” said Straubel, who was recently named to Tesla’s board of directors.

Around 2014, as Tesla was preparing to produce the Model 3, its first mass-market electric car, Kirkhorn was part of a key group that negotiated a deal with Panasonic to build a joint-venture battery factory, said Kelty, Tesla’s former senior director of battery technology. Tesla would pay for construction and Panasonic would contribute its proprietary technology.

A big question was how much Tesla would pay for Panasonic batteries. Kelty and Kirkhorn traveled to Moriguchi, Japan, to hammer out a deal. “In the early days, he was my sounding board on anything to do with price,” recalls Kelty, one of the negotiators on the project. “Elon and Panasonic had their own expectations, but they weren’t exactly the same.”

Ultimately, the two sides reached a landmark agreement to jointly build a factory in Nevada to produce batteries that power many of the Tesla vehicles currently on the road in the United States.

Brandenburg State Governor Dietmar Waldeck, German Chancellor Olaf Scholz and Musk attended the opening ceremony of Tesla's Gigafactory

Many former employees said Kirkhorn’s team had debated for years whether Tesla should get certain parts from suppliers or make them in-house. As the Model 3 neared production, Tesla considered entering the field of refining lithium, a key element in making batteries, according to people familiar with the matter. They said Kirkhorn’s financial analysis helped convince the company to go through with it.

“Is it too risky or a problem you don’t want to talk about? He’ll find it and dig into it quickly,” said RJ Johnson, who once ran Tesla’s energy business. “He’ll politely call it out.”

05Believe that Tesla will achieve unprecedented scale

Straubel, who left Tesla in 2019 and now runs battery materials company Redwood Materials, said Kirkhorn’s willingness to “share bad news louder and faster than good news” was one of the qualities that earned Musk’s trust. The two also shared the joy of success and the sorrow of failure over more than a decade, he said.

Kirkhorn was frustrated with Musk's high-profile investment in Bitcoin, according to people familiar with the matter. Tesla bought $1.5 billion worth of Bitcoin in early 2021, and Kirkhorn was reluctant to keep the cryptocurrency on the company's balance sheet, and the company sold most of it last year. U.S. Securities and Exchange Commission (SEC) documents show that the company has made about $192 million in gains on cryptocurrency investments.

Straubel said Kirkhorn knows the entire company, from Tesla’s people to its technology. “He almost scares people more because he’s so often right,” he said.

Tesla Model Y on display at this year's Brussels Motor Show

A few years ago, Tesla’s energy executives met with Kirkhorn to set annual goals, and he asked them to each sign a pledge outlining their goals, according to people familiar with the matter. Kirkhorn said he pulled out the pledge at least once in the following months to remind everyone of their commitment, one of the people recalled.

Tesla's future is uncertain as electric vehicle rivals gain ground. Tesla, which once enjoyed seemingly insatiable demand for its vehicles, has cut prices on some of its U.S. models by more than 20% this year, and investors widely believe the company needs another more affordable model to maintain its current growth pace.

“Increasing affordability allows us to easily invest and scale,” Kirkhorn said in March. With a dash of Musk-like gusto, he added: “We’re going to achieve unprecedented scale in manufacturing.”