According to news on October 20, the stock price of US electric vehicle manufacturer Tesla fell 9.3% on Thursday, closing at $220.11 per share. Tesla CEO Elon Musk’s personal wealth subsequently evaporated by US$16.1 billion (approximately 118 billion yuan). Tesla's financial report released the day before showed that third-quarter revenue was US$23.35 billion and adjusted earnings per share were US$0.66. Both revenue and profit were lower than analysts' average expectations. This is the first time since the second quarter of 2019 that Tesla has failed to meet profit and revenue expectations.
As the world's richest man, Musk's wealth reaches US$209.6 billion. Most of his wealth comes from his 13% stake in Tesla, but his wealth fell by $16.1 billion as the company's stock price plummeted.
During the earnings call, Musk took a negative stance on the global economic situation. He expressed concern about the high interest rate environment, noting that it makes it more difficult for consumers to buy cars. Tesla previously reported delivering 435,059 electric vehicles in the third quarter of this year, its first single-quarter sales decline, and profit margins falling to their lowest level in four years.
Despite the poor global macroeconomic situation, Musk's wealth still increased by more than US$70 billion in 2023, and Tesla's stock price also rebounded. After being briefly surpassed by Bernard Arnault of LVMH Group, Musk once again became the world's richest man by a huge advantage.
Musk said Tesla is working hard to reduce the cost of a single vehicle, which will be its top priority before going "full steam" to build a new factory in Mexico.
"We have to make our products more affordable so people can afford them," Musk said on the earnings call.
Despite the difficulties, Tesla is determined to deliver 1.8 million new cars by the end of the year. Tesla remains the world's most valuable automaker and plans to deliver its first Cybertruck electric pickup truck in November, about two years later than originally planned.
Bank of America analysts reiterated their neutral rating on Tesla shares and lowered their guidance for the company's fourth quarter and coming years due to the company's "lower gross margins." Analysts also expressed surprise that Musk spent so much time discussing the global economy.
"It's interesting that Musk spent a lot of time talking in general terms about the macroeconomic environment and the impact of current high interest rates," Bank of America analysts wrote in a note Thursday.
Morgan Stanley analysts also said that despite Tesla's disappointing third-quarter results, "cautious comments" around the economy "set the tone for the stock's immediate reaction."
Morgan Stanley analysts wrote: "In our view, the third quarter 2023 earnings call was one of the most cautious Tesla calls we have heard in years." They believe Tesla's concerns about interest rates are reasonable, but also question whether Tesla's caution is due to increased industry competition or slowing market demand.
Musk also said on the earnings call that he wanted to "lower expectations" for the Cybertruck electric pickup truck. He emphasized that it would take a year or more for the car to become a "major contributor to positive cash flow" and that there would be challenges in mass-producing the car.
"We're digging our own grave," Musk said.
Deutsche Bank analysts were concerned about Musk's rhetoric.
Analysts at Deutsche Bank wrote in a report: "Tesla's third-quarter profit fell short of expectations, coupled with relatively cautious forward-looking comments on vehicle demand, 2024 prospects, the slow and expensive growth of the Cybertruck electric pickup truck, and the uncertain timeline of the next-generation platform, which makes us worry that Tesla's fundamentals will face more challenges next year."
Analysts have been expressing concerns about Tesla's prospects in 2024.