Musk stated at Tesla’s annual shareholder meeting that commodity and component costs are trending downward over the next six months. He also said that he anticipates a modest recession lasting 18 months.
“The trend is downward, which signals we have passed peak inflation,” Musk remarked at Tesla Inc. (NASDAQ:TSLA)’s headquarters and plant in Austin. “I believe inflation will fall significantly at some time in the future,” he said.
As inflation pushes consumers and business bottom lines, central banks have tightened policy. In the United States, consumer prices rose 9.1% year on year in June, according to Federal Reserve officials, and the price increases are expected to continue. The following inflation report is due on August 10.
“We have some visibility into where costs are heading over time,” Musk added, noting Tesla Inc. (NASDAQ:TSLA)’s requirement to purchase raw materials months in advance of when they would be utilized. “What we’re seeing now is that most of our commodities, most of the things that go into a Tesla Inc. (NASDAQ:TSLA) – not all, but more than half – are trending down in six months,” he added.
Tesla Inc.’s (NASDAQ:TSLA) shares fell 0.8% to $918.70 in New York at 6:30 a.m. Friday, before the start of regular trading.
While Tesla Inc. (NASDAQ:TSLA) has a global perspective on input costs and consumer health, Musk warned that making macroeconomic forecasts is a recipe for disaster and that his comments amounted to a guess and total speculation. The CEO also cautioned that trends could shift.
According to Musk, reservation holders and future customers of Tesla Inc.’s (NASDAQ:TSLA) upcoming Cybertruck may still be affected by inflation. The “Blade Runner”-inspired pickup was unveiled in November 2019, and he claims that a lot has changed since then. Musk announced a $39,900 starting price when the company began accepting reservations.
The specifications and pricing will be different, Musk stated. He also expressed how “no one could have predicted the inflation and other issues that have occurred.”
Featured Image: Megapixl © Taina10
