Musk, economy alarm: «It could end up like 2009» | EUROtoday

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The new $5 billion manufacturing facility in Mexico’s northern state of Nuevo Leon might fall off the radar. It is probably the most highly effective alarm sign to return from the convention name on Tesla’s quarterly accounts. CEO Elon Musk stated he was involved in regards to the impression of excessive rates of interest on households trying to purchase a automotive. This is why the growth initiatives on the manufacturing entrance of the world’s main producer of battery-powered automobiles (now adopted carefully by Chinese rival BYD) could decelerate.

Pressed, Musk did not mince phrases: «I’m scared by what occurred in 2009, when General Motors and Chrysler went bankrupt. And there are loads of wars on this planet.”

Tesla yesterday missed Wall Street expectations for third-quarter margins, profits and revenues. And the cause lies in the price war declared by Musk in 2023 to support volumes. To the detriment of profitability: gross margin was less than 18% compared to 25% a year ago. Cost cutting was portrayed by the tycoon as “digging a tunnel with a spoon”.

Musk points the finger at the conditions that have caused the global economy to slow down. “If macroeconomic conditions are stormy, even the best ship still experiences difficult times,” he said, unlike a year ago, when he said Tesla would be “recession resilient.” Furthermore, the threat of Chinese competition has further materialized over the last 12 months.

«Numerous individuals dwell on paychecks and lots of money owed. Credit card debt, mortgage debt. This is the truth for most individuals. Sometimes it’s troublesome for many who earn a excessive revenue, maybe greater than 200 thousand {dollars} a 12 months, to grasp what life is like for many who earn fifty, sixty or 70 thousand {dollars}, i.e. the bulk. People are hesitant to purchase a brand new automotive if there may be uncertainty within the economy.”