Elon Musk fears that high interest rates will make new cars unaffordable to many consumers
https://www.carscoops.com/author/bradcarscoops-com/
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by Brad Anderson
2 hours ago
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Tesla chief executive Elon Musk says the carmaker won’t rush to increase production of its EVs over fears of economic uncertainties and the impact of high-interest rates.
While speaking with analysts and investors about Tesla’s third-quarter financial results, Musk voiced concerns about high-interest rates potentially making new cars unaffordable for consumers. He added that Tesla is proceeding trepidatiously with its planned factory in Mexico, noting that it doesn’t want to go “into top speed into uncertainty.”
“A large number of people are living paycheck-to-paycheck and with a lot of debt,” he said. “They’ve got credit card debt, mortgage debt. So, that’s the reality for most people. It’s sometimes difficult for people who are high-income earners, and I would say would be someone who is earning over $200,000 a year to understand what life is like for someone who is earning fifty or sixty or $70,000 per year, which is most people.”
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Musk added that the price of the company’s best-selling car is “almost unchanged” for consumers despite repeated price cuts this year because of higher financing costs, Reuters reports. He also noted that if a new Model Y were to cost as much as a Toyota RAV4, very few people would buy the Toyota but said as many American buyers cannot afford to wait for the EV tax credit, “our car is still much more expensive than a RAV4.”
Read: Tesla Cybertruck Deliveries To Start Nov. 30, Initial Production Capacity At 125,000 Units
“If the macroeconomic conditions are stormy, even the best ship is still going to have tough times,” he added. “I apologize if I’m more paranoid than I should be, because that might also be the case, because I have PTSD from 2009, big time. And 2017 through 2019, was no picnic either. So, you know, the auto industry is also somewhat cyclic. People hesitate to buy a new car if there’s uncertainty in the economy.”
Musk’s statements come shortly after Ford confirmed that it would cut one of three shifts on the F-150 Lightning’s production line. GM also recently confirmed it will delay production of the Silverado EV and Sierra EV by 12 months due to slowing demand for its EVs.
