Tesla(TSLA)'s first-quarter loss was "catastrophic" and the electric auto maker's board should hold CEO Elon Musk responsible, management expert Jeffrey Sonnenfeld told CNBC on Thursday.
"When is the board going to wake up?" asked Sonnenfeld, a senior associate dean at the Yale School of Management. "You know what they are? They do understand cruise control better than anybody else. The board is on 'cruise control.'" Sonnenfeld's "cruise control" dig was referring to Tesla's innovative Autopilot feature and the company's touted self-driving vehicle efforts.
Shares of Tesla were under pressure early Thursday after the company posted late Wednesday an adjusted loss of $2.90 per share for the first quarter. That was four times worse than Wall Street analysts had expected. Revenue was also below forecasts as demand for its electric cars waned. Sales of its vehicles rose 36% to $3.72 billion from $2.74 billion a year ago. But that was down 41% from the fourth quarter.
To note, the company had warned earlier this month that first-quarter income would "be negatively impacted" because of "lower than expected delivery volumes and several pricing adjustments." And Musk cited on the post-Q1 conference call with analysts Wednesday evening that there were seasonality challenges — saying people don't like to buy cars in the winter.
However, Sonnenfeld, with decades of experience studying CEO leadership and corporate governance, characterized Tesla's financial results as the "worst disaster" in the technology sector that "a lot of us can remember in a long time." It was especially bad for a company with a stock market value as large as Tesla, he added. Ahead of Thursday trading, Tesla's market cap was nearly $45 billion.
It isn't that Musk has "just dramatically failed in expectations but it's that he set these expectations himself," Sonnenfeld said. Tesla's stock is not "anywhere near $420," he added, referring to the per-share price quoted in Musk's Aug. 7 tweet about taking the company private, which landed the CEO and Tesla in hot water with the Securities and Exchange Commission.
Sonnenfeld also scoffed at Musk's prediction at an event on Monday of some 1 million of the automaker's robotaxis, with no human drivers, hitting U.S. markets next year, calling such promises "ludicrous."
Tesla did not immediately respond to CNBC's request for comment on Sonnenfeld's remarks.