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Tesla Motors, Inc. Spokesman Exits -- Is Public Relations in Elon's "Critical Path"?

By Daniel Sparks – Mar 17, 2016 at 12:35PM

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Here's what Tesla's recent executive departure could mean about the company's priorities.

Anyone who has read Tesla (TSLA -0.34%) CEO Elon Musk's biography knows that when the visionary hones in on what he deems the "critical path," or the most critical element to focus the business on at the moment, the subject becomes the attention of relentless scrutiny until the bottleneck is alleviated. Just as Model X deliveries are beginning to ramp-up, and ahead of Tesla's Model 3 unveil later this month, does the company's lead public relations spokesman departure provide insight into what's on Musk's critical path now?

Another shakeup in Tesla's public relations
Just 18 months after getting the job, Tesla chief spokesman Ricardo Reyes has left the company, according to Bloomberg.

A Tesla spokesman confirmed that Reyes has left the company. He had the top communications job from November 2014 until recently. Reyes declined to comment on his departure.

The timing is notable. Two particular public relations initiatives stand out as items that could be in Musk's critical path.

The first public relations item currently in focus is Tesla's ongoing effort to convert Model X reservations into orders as the company ramps up production. With 35,000 reservations for the SUV, this might initially sound like an easy job. But one facet of the initiative makes it much more difficult: the company wants to prioritize production of highly optioned versions of the SUV in order to moderate the impact of initially higher costs of manufacturing as it works down the cost curve and ramps up production. This means Tesla needs to be on top of its game when it comes to garnering as many orders of fully loaded Model X units as possible.

Then, of course, there's Tesla's upcoming Model 3 launch. Musk likely has high expectations for its public relations team's plans for the important vehicle.

Elon Musk. Image source: Tesla Motors.

Initiatives like these are especially important for Tesla since the company doesn't spend money on marketing. On the forefront of a new technology, Tesla relies on its tech-centric brand and the uniqueness of its products to spark significant media coverage, hoping it fills its void of paid advertising.

Is a strategic shift in public relations coming?
Until a new executive steps up to fill Reyes' role and he or she is put to the test, it's impossible to know how another chief spokesperson shakeup could work out for the company.

But Reyes' departure could at least signal that public relations is on Musk's critical path. And given how important public relations is in the absence of advertising, Musk's attention in this important area of Tesla's business could be beneficial to investors in the longer-term.

Of course, without comment from Tesla or Reyes on why he left, there's no basis for any specific conclusions at this point.

Investors should keep an eye on Tesla's public relations departures and hires, as the role is more important to Tesla than it is to its advertising peers.

Daniel Sparks owns shares of Tesla Motors. The Motley Fool owns shares of and recommends Tesla Motors. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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