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Friday, March 31, 2023

Elon Musk just brought down the entire EV sector with these comments

Elon Musk Just Brought Down The Entire Ev Sector With These Comments

Chris Isidore | CNN Business

Elon Musk announced six months ago that he would stop attending investor calls unless he needed to say “something important.” He had to stick to this plan.

After missing Tesla’s third-quarter call, he returned to it on Wednesday to discuss record earnings and fourth-quarter earnings. But his comments on this week’s call spooked investors, despite Tesla’s strong financial results. On Thursday, Tesla stock suffered its worst day in months, shedding 11.6%, and with it other EV stocks.

Musk focused his comments on supply chain issues that have affected Tesla much less than other automakers. While Musk said that Tesla is on track for “comfortable growth above 50% in 2022” and that the chip shortage is “better than last year,” he also noted that the supply chain issue “still remains an issue that can slow down deployment. new cars that were expected this year.

He said plans for his Cybertruck, Tesla’s first pickup truck, will be pushed back to at least 2023, along with a new roadster and semi-trailer. He said he hopes Tesla will be “ready to put them into production next year. This is most likely.”

That wasn’t what Tesla’s investors wanted to hear, especially as competition is heating up: EV truck maker Rivian is already building and selling its electric pickup truck, which recently won the Motor Trend Truck of the Year award. Ford is due to begin production of its F-150 Lightning electric vehicle in the spring and plans to produce 80,000 trucks a year to meet large pre-orders. General Motors announced this week that it will begin electric vehicle production of its Silverado and Sierra pickups in 2024.

Some Wall Street analysts were disappointed by Musk’s comments about the call.

“There was no reason he needed to redouble his efforts and yell ‘supply chain’ in a crowded theater,” said Dan Ives, technical analyst at Wedbush Securities. “He gave the bears meat on the bones. That’s why the shares are sold. I am convinced that if Musk had not been involved in the negotiations, the stock would probably have risen on Thursday.”

None of Musk’s comments directly addressed the situation at other electric vehicle companies. But all EV stocks in their purest form fell sharply on Thursday. Rivian shares fell 10.5%, while Lucid shares fell 14.1% and shares in Chinese electric car maker Nio fell 6.8% in the US. Ives said Musk’s comments raised concerns that if a big electric car maker like Tesla were to run into trouble, its smaller upstart competitors could suffer even worse.

Tesla shares were down 21% this year by Thursday’s close, and their market capitalization fell below $1 trillion, a benchmark reached late last year.

World Nation News Desk
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