Whether it is predicting the rise of cybernetically-enhanced humans, an army of robot butlers or a new era of interplanetary travel, Elon Musk has earned a reputation for seeing what the future holds.
But when it comes to the near-term outlook for the economy, the Tesla and SpaceX CEO is just as lost as the rest of us.
“One day it seems like the world economy is falling apart and the next day everything is fine,” he told investors on Wednesday. “I don’t know what the hell is going on to be totally frank, I wish I did.”
While Musk has acknowledged he can in fact be fallible at times too, he rarely shies away from voicing his convictions regardless of the subject—especially when it comes to the economy.
Last summer, for example, he trimmed salaried staff over a “super bad feeling” he had about the demand outlook. Later he called Federal Reserve chair Jay Powell “foolish” for hiking rates in March and argued the central banker was so bad at managing risk that an A.I. chatbot couldn’t possibly be any worse.
In May, Musk then blamed the turbulence in the banking sector and the resulting withdrawal of consumer credit as a distinct threat to his car business.
So it’s rare when the Tesla CEO simply throws his hands up in resignation.
Thus far, however, thanks to multiple price cuts, Tesla was able to notch another record quarter in terms of vehicle sales. That helped it generate quarterly revenue that nearly hit the $25 billion mark for the first time ever.
But there are a few worrying signs on the horizon—even for Tesla.
Musk has an abrupt change of heart when it comes to FSD
For one, its operating income actually shrank both sequentially and year-on-year slightly.
A price war Musk sparked to undercut rivals led to its operating margin narrowing a breathtaking 5 percentage points to 9.6% over the already comparably weakQ2 of 2022, when COVID-related lockdowns in China limited production.
Musk also predicted on Wednesday that third-quarter production would be a “little bit down” due to more factory upgrades.
When pressed for more specifics by analysts, he bristled that the question ventured “too much into the weeds” and swiftly changed subjects.
Wedbush analyst Dan Ives suspected this could be a sign that the heavily touted refresh of the Model 3 sedan, internally known as Project Highland, is just around the corner.
Moreover, Musk announced out of the blue that he would offer a “one-time amnesty” to those customers, allowing them to transfer their Full Self-Driving software feature to a new car so long as they order one in the third quarter.
“I hope this makes people happy. This is a one-time thing,” he said, justifying his abrupt change of mind.
Many Tesla customers have been demanding this for years after Musk failed to deliver a car that can drive itself without human supervision as promised. Currently, FSD is non-transferable.
“Sounds like a Q3 [volume] push,” wrote Berlin-based auto analyst Matthias Schmidt, who publishes a monthly report on Europe’s growing electric vehicle market.
The stock has been on a tear lately, soaring 40% since the start of June and setting a new record for the number of consecutive days in the green.
Musk for his part reaffirmed on Wednesday he still expected to deliver 1.8 million Tesla vehicles to customers this year, despite the persistent macro uncertainty.
“If somebody’s got a crystal ball for the global economy, I’d really appreciate it if i could borrow that,” he quipped. “DM me on Twitter.”
