- The uncertain macroeconomic environment has baffled even Elon Musk.
- Tesla has repeatedly slashed the price of its EVs this year in response to competition and rising interest rates.
- Tesla on Wednesday reported record sales of $24.93 billion, beating expectations.
To say the least, the last three years have been tumultuous, with the economy riding a roller coaster through the COVID-19 pandemic, inflation, and interest rate hikes. fear of depression, And now I’m hoping for a soft landing.
The situation is so confusing that even Elon Musk, the president of several visionary futuristic tech companies, seems to be outraged, accurately expressing how many feel. I had the right combination of words.
“One day it looks like the global economy is going to collapse,” Musk, CEO of automaker Tesla, said at a second-quarter earnings call with the United States. It looks like it’s going to be like this, but the next day it’s fine. analysts said Wednesday.
“I would say we are entering a very turbulent period,” he added.
Musk even asked for moral help to back up his case. “I don’t have a crystal ball of the global economy. I would really appreciate it if you could lend me that crystal ball,” he said. Tesla’s investor relations department put it more succinctly: investor deck “The challenge in these uncertain times is not over.”
Tesla has already price cut In order to keep up not only with the competition but also with the economy, it has repeatedly carried out the development of electric vehicles (EVs) this year.
“Buying a new car is a big decision for most people, so whenever there’s financial uncertainty, it’s common for people to pause buying a new car, at least to see what happens. It’s a target,” he said.
It doesn’t help that the US Federal Reserve has been in a rate hike cycle since March 2022, making it more expensive to buy anything with debt. This means that the price of cars purchased on credit will also increase.
That’s why Tesla has lowered the price of its EVs, Musk explained.
Musk suggested that EV makers could cut prices again to boost sales, depending on the macro environment.
“I think it makes sense to sacrifice margins to produce more vehicles,” he said on a conference call.
Tesla reported record revenue of $24.93 billion on Wednesday, beating analysts’ expectations of $24.47 billion, according to Refinitiv data. Adjusted earnings per share came in at 91 cents, beating analyst estimates of 82 cents per share.
Tesla’s The stock fell 4.2% in after-hours trading to $279.07 per share. The stock closed 0.7% lower on Wednesday, but is up 136% since the beginning of the year.