Question of Whether Elon Musk Is Telling the Truth

Cars and Drivers

Published: April 17, 2018 6:25 am

Last Updated: January 12, 2020 12:55 am

Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk has disappointed investors repeatedly, based on flawed predictions of car production and sales. His reliability as much as anything else has hurt Tesla’s stature and the value of its shares. The most recent announcement that has been questioned is why Tesla has shut down production of its Model 3.

The Model 3 is Tesla’s offering to the mid-priced car market, with a base of about $35,000. At one point, about 400,000 people had made deposits of $1,000 to get in line for the car. Some of those have lost faith and bought other cars, or perhaps dropped out of the car market entirely.

The new wrinkle to the saga of the Model 3 is a shutdown of its factories that will last several days. Tesla has problems with the automation of its production and assembly operations. Whether those can be corrected in a matter of days remains to be seen. Musk has forecast Tesla will become profitable and cash flow positive faster than most outsiders believed is possible. In a tweet meant to offset comments about Tesla’s finances as reported by The Economist, Musk wrote:

The Economist used to be boring, but smart with a wicked dry wit. Now it’s just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money.

— Elon Musk (@elonmusk) April 13, 2018

In the meantime, Tesla’s stock is down 7% in the past month, which continues a multimonth sell-off. Musk’s credibility is weak enough that his predictions are no longer accepted by the broader market.

Even if Model 3 production does begin again in a week, Musk has to show that this production can grow at a very rapid rate so that Tesla can fulfill the demand for hundreds of thousands of units. That is, unless his forecast for demand is as shaky as much of what he has said about the company for the past several months.

24/7 Wall St.
America’s Longest-Lasting Cars

100 Million Americans Are Missing This Crucial Retirement Tool

The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.

Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.

A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.

Click here to learn how to get a quote in just a few minutes.