Elon Musk says he doesn’t ‘know what the hell is going on’ with the economy

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• Even Elon Musk has been stumped by the uncertain macroeconomic climate.
• Tesla has slashed EV price this year in order to compete with rising interest rates and the increasing competition.
• Tesla's revenue, which surpassed expectations by $24.93 billion, reached a record high.

It's been an interesting ride over the past three years. The economy has gone through inflation, rate increases, fears of recession, and even a COVID-19 pandemic. Now, there are hopes for a soft landing.

Even Elon Musk, the CEO of several futuristic and visionary tech companies, seemed exasperated. He used the exact words to describe how many people feel.

The world economy seems to be in a state of collapse one day and then it is fine the next. Musk, CEO of Tesla, told analysts during the company's second-quarter earnings conference call on Wednesday that he didn't understand what was going on.

He added, "We are in turbulent times."

Musk sought psychic help to prove his point. "I don’t have a global economic crystal ball. He said he would be grateful to borrow the crystal ball. Tesla's Investor Relations Department was even more succinct in their investor deck, stating that "challenges posed by these uncertain times have not yet been overcome."

Tesla has already cut prices on its electric vehicles (EVs) repeatedly this year, not only to keep up with competition, but also for the economy.

He said that buying a new vehicle is a major decision for most people. So, whenever there's an economic downturn, they tend to pause and wait, at least, to see how things turn out.

The US Federal Reserve is in a cycle of interest rate hikes since March 2022. This makes it more expensive to purchase anything on credit, and therefore the price of vehicles purchased with credit will also increase.

Musk said that Tesla had to cut the price of its EVs because "we had to do something."

Musk said that depending on the macro environment, the EV manufacturer could reduce prices to boost sales.

During the conference call, he stated that it was a good idea to sacrifice margins for more cars.

According to Refinitiv, Tesla announced a record-breaking revenue of $24.93 Billion on Wednesday. This was higher than the $24.47 Billion analysts predicted. The adjusted earnings per share were 91 cents, which was higher than the analysts' expectation of 82 cents.

Tesla shares fell by 4.2% in after-hours trading to $279.07 per share. The shares closed Wednesday 0.7% lower and have risen 136% in the past year.

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By: htan@insider.com (Huileng Tan)
Title: Elon Musk says he doesn’t ‘know what the hell is going on’ with the economy
Sourced From: www.businessinsider.com/elon-musk-tesla-whats-going-on-with-economy-earnings-2023-7
Published Date: Thu, 20 Jul 2023 02:55:44 +0000

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