Elon Musk, CEO of Tesla Inc (TSLA.O), believes a recession would persist until the spring of 2024, he tweeted on Friday, after suggesting earlier this week that a type of recession prevailing in China and Europe was due to demand for its electric vehicles.
There is an imbalance in the demand and production scale of EVs.
Elon Musk Claims A Global Recession Could Last Through 2024!
“I’m just guessing, but probably until the spring of ’24,” Musk stated on Twitter in response to a user’s question on how long the recession will endure. It was unclear whether Musk was referring to a worldwide recession or expanding on his remarks.
Regarding China and Europe on Wednesday. Tesla Inc (TSLA.O) shares slumped 6.6% to $207.28 on Thursday, a day after Musk told analysts on a conference call that weakness in China and Europe was making the demand a little more difficult than it would be.
At least six brokerages reduced their price goals on the stock, with Tesla bull Wedbush Securities slashing its price objective by $60 to $300. Tesla’s third-quarter revenue fell short of analysts’ expectations on Wednesday.
While Elon Musk told analysts that Tesla has “great demand” for the current quarter, the electric vehicle manufacturer announced it would miss its yearly delivery target owing to restricted transportation capacity.
Tesla said earlier this month that it delivered a record 343,830 EVs in the most recent quarter. Not only did it fall short of analysts’ expectations of 359,162, but it also fell short of Tesla’s output of 365,923, a rare occurrence for the manufacturer.
Whose deliveries have been greater or comparable to production in several recent quarters. During a July conference call, Musk stated that macroeconomic uncertainty might have an influence on demand for its electric vehicles, but when asked for details by an analyst.
Elon Musk stated that the firm did not have a demand problem, but rather a production problem. According to sources, Elon Musk stated that he had a “very awful feeling” about the economy and that Tesla needs to reduce approximately 10% of its workforce.
Later, he stated that the cut would only apply to salaried employees. Tesla stock plunged as much as 9% on Thursday, reaching a 16-month low. “The results will almost certainly add to the argument around demand destruction.
That erupted after 3Q deliveries tracked -5% below company-compiled consensus,” JP Morgan said in a report. Tesla fell short of its automotive gross margin forecasts on Wednesday, owing to the expenses of ramping up production at its new plants in Berlin and Austin.
Musk Displays Confidence In The US Economy!
Previously, Elon Musk stated his faith in the US economy in comparison to other regions of the world. But some parts of the United States are raising interest rates more than their threshold limit, but they will eventually lower it.
Elon Musk also spoke on China and Europe, saying that although the former is in “quite a recession boom” owing to the real estate market, the latter “has some form of recession, but it is also driven by some energy.” This year alone, the central bank raised rates.
Three full percentage points have a significant impact on asset values ranging from equities and property to cryptocurrency. Even though policymakers knew inflation was near 8% at the start of March. The Fed was still extending its balance sheet and hence the money supply.
Tesla CEO Elon Musk has declared his distaste for the Fed, joining Wharton finance professor Jeremy Siegel in accusing Fed members of committing the worst error in the institution’s 110-year history.
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