SpaceX Chief Engineer Elon Musk takes part in a joint news conference with T-Mobile CEO Mike Sievert (not pictured) on the SpaceX Starbase, in Brownsville, Texas, U.S., August 25, 2022.
Adrees Latif | Reuters
Elon Musk sees elements of a recession in China and Europe and says that the U.S. Federal Reserve is raising rates of interest by an excessive amount of.
But when asked on Tesla’s third-quarter earnings call on Wednesday how his electric automotive company will fare in a possible recession, the world’s wealthiest person expressed little concern.
“To be frank, we’re very pedal to the metal come rain or shine,” Musk said in response to an analyst’s query. “We will not be reducing our production in any meaningful way, recession or not recession.”
Tesla reported adjusted earnings of $1.05 per share, topping analysts’ estimates of 99 cents per share. The stock dropped 5% in prolonged trading as revenue got here in at $21.45 billion, missing analysts’ expectations of $21.96 billion. The corporate has lost 45% of its value this yr.
Musk has been critical of the Fed, which has been lifting its benchmark rate of interest to try to tamp down soaring inflation. He continued with that theme on Wednesday.
“The Fed’s decisions make sense in the event you’re looking within the rear-view mirror not in the event you’re looking the windshield,” Musk said.
Still, even with the price of capital on the rise alongside the costs for goods, Musk sees Tesla doing OK as electric vehicles replace gas-powered cars.
“The general public at large realizes that world’s moving towards electric vehicles, and it’s silly to purchase a recent gasoline automotive at this point since the residual value of that gasoline automotive goes to be very low,” Musk said. “So, we’re in a really great place.”
Musk added, “I would not say it’s recession-proof however it’s recession-resilient, because mainly the people of Earth have made the choice largely to maneuver away from gasoline cars.”
The Tesla CEO also commented on his pending $44 billion acquisition of Twitter. He’s currently enmeshed in a legal battle with the social media company regardless that he recently modified course and said he would follow through along with his purchase agreement.
Musk said he’s “excited concerning the Twitter situation” and that the corporate has “kind of languished for a very long time but has incredible potential.”
“The long-term potential for Twitter is an order of magnitude greater than its current value,” Musk said.
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