Adrees Latif/Reuters
- Even Tesla CEO Elon Musk is stumped about the uncertain macroeconomic environment.
- Tesla has slashed EV prices this year to keep up with the competition and rising interest rates.
- Tesla beat expectations when it reported an all-time high revenue of $24.93 billion on Wednesday.
To put it mildly, it's been a wild ride these past three years with the economy on a roller coaster reacting to the COVID-19 pandemic, inflation, rate hikes, recession fears, and new hopes of a soft landing.
The situation has been so confusing that even Elon Musk, the boss of several visionary and futuristic tech companies, seems exasperated and has precisely the right combination of words to express how many feel.
"One day, it seems like the world economy is falling apart, next day, it's fine. I don't know what the hell is going on," the Tesla CEO said during a second-quarter earnings call with analysts on Wednesday.
"We're in, I would call it, turbulent times," he added.
Musk even sought out psychic assistance to underscore his point. "I don't have a crystal ball for the global economy. I'd really appreciate it, if I could borrow that crystal ball," he said. Tesla's investor-relations department was more succinct, saying in its investor deck that the "challenges of these uncertain times are not over."
Tesla has repeatedly slashed prices for its electric vehicles this year to keep up with the competition and the economy.
"Buying a new car is a big decision for the vast majority of people, so any time there's economic uncertainty, people generally pause on new-car buying at least to see what happens," he said.
It doesn't help that the Fed has been in an interest-rate-hiking cycle since March last year that has made it more expensive to buy anything with debt — meaning that the price of any vehicle purchased on credit has also gone up.
That's why Tesla slashed the prices of its EVs Musk said: "We had to do something about that."
Musk said the EV maker could cut prices again to boost sales depending on the macro-environment.
"I think it makes it does make sense to sacrifice margins in favor of making more vehicles," he said during the call.
Tesla reported an all-time high revenue of $24.93 billion on Wednesday, beating the $24.47 billion analysts had forecast, per Refinitiv data. Earnings per share came in at 91 cents adjusted, beating the 82 cents analysts had expected.
Tesla's share prices fell 4.2% to $279.07 apiece in after-hours trade. They closed 0.7% lower on Wednesday but are up 136% this year.