Musk Addresses Tesla's Profitability And Economic Challenges At Annual Shareholders' Meeting

Elon Musk underscored Tesla Inc’s TSLA profitability and forecasted a challenging economic environment in the upcoming year at the company's annual meeting of the shareholders.

“Making electric vehicles profitably is hard,” Musk admitted, acknowledging the struggles of Tesla’s competitors, many of whom are manufacturing EVs at a loss. He took a moment to praise Tesla’s team for their efforts, adding, “We are actually making EVs profitably. And almost no one else is.”

Manufacturing at scale with positive cash flow, Musk continued, is “excruciating.” Despite the inherent difficulties, Tesla has been increasing its free cash flow for the last few years, proof of the company’s resilience and strategic approach.

Musk also warned shareholders about the potential impact of rising interest rates on car affordability, a key factor for many consumers basing their purchase decisions on monthly payments. With many banks currently tightening credit, the CEO anticipates a challenging year ahead for Tesla.

“It’s important to understand that no company is immune to the macroeconomic environment,” Musk stressed, predicting a period of global economic difficulty for at least the next 12 months. He pointed out that Tesla is not isolated from potential impacts, but also expressed optimism about the company’s resilience.

While acknowledging the potential gloom, Musk instilled confidence in investors, saying that “It won’t be darkness forever.” He anticipated a global economic turnaround in roughly a year and believed Tesla will be well-positioned when that happens.

"So anyone who is a long-term investor, I think [they] will do extremely well,” he said.

TSLA Price Action: Shares of Tesla are trading 0.83% higher at $166.52 in Tuesday's after-hours session, according to Benzinga Pro.

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