Elon Musk announced that he was in doubtToI don’t know about my plans build a Tesla plant in Nuevo Leon when assessing economic prospects due to the effect of high interest rates.
After the company missed Wall Street’s earnings, earnings and gross margin expectations in the third quarter, the billionaire said he wanted to get a better idea of where the economy was headed before going “full speed ahead” to build the plant. in Mexico.
“If interest rates remain high, it will be much more difficult for people to buy a car. They just can’t afford it,” he said on a conference call with analysts.
In March, Tesla announced it would build a large plant in Nuevo Leon, where it already has suppliers, in what Mexican officials said would be an investment of more than $5 billion, although the company did not disclose the assigned capital cost.
Fears that cars will become less affordable due to high tariffs
Tesla has so far managed to maintain demand through a series of price cuts, but Musk spent much of the call expressing concerns about further expansion, saying he fears rising interest rates will make cars less expensive and affordable.
The price of the popular Model Y SUV remained “pretty much the same” for consumers even after Tesla cut prices, Musk said, attributing the move to higher financing costs.
When asked to provide more details about the Mexico plant, Musk said:
I am commemorated in 2009 when General Motors and Chrysler went bankrupt. I don’t want to go full speed ahead into uncertainty.
The businessman added that there would be “huge challenges” in achieving production volumes for the long-delayed Tesla Cybertruck pickup truck and ensuring positive cash flow.
The company’s shares fell 3% in after-hours trading on Wall Street Wednesday. Shares ended the session down 4.8%.
“It’s a Matter of Time” plant in Mexico
He later made it clear that Tesla would “certainly” build an assembly plant in Mexico, for which they already have a site.
“It’s a matter of time,” he explained, adding: “Interest rates must come down.”
Musk said that if he knew what interest rates would be in the future, he could indicate when the plant would be built. (Reuters and EFE)
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Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
