Elon Musk is pessimistic. The serial entrepreneur believes that the clouds are getting heavier for the worldwide economic system.
He has simply made a doom prediction that dangers throwing a chill amongst customers as uncertainties stay in regards to the well being of the economic system amid cussed inflation.
For the CEO of Tesla (TSLA) – Get Free Report and proprietor of Twitter, the following 12 months are going to be troublesome. He added that no enterprise is immune and expects a cascade of company bankruptcies. He made this prediction throughout Tesla’s annual shareholder assembly on May 16 in Austin, Texas. Musk was attempting to elucidate why Tesla determined to decrease the costs of its automobiles six occasions this yr.
“The vast majority of people buy cars based on the monthly payment,” he defined. “It’s just ‘do they actually have enough money. Can they afford it?”
He then added that this situation has turn out to be much more vital as a result of rates of interest are excessive and on the similar time there’s a banking disaster which prevents many banks from lending cash to everybody who wants it.
Lenders, he argued, are targeted on saving themselves from failing.
‘It Won’t Be Darkness Forever’
As a consequence, “this is going to be a challenging 12 months, I want to be sort of realistic about it. Tesla is not immune to the global economic environment. I expect to be, at a macroeconomic level, difficult for at least the next 12 months.”
But “Tesla will get through it and will do well,” he mentioned.
This won’t be the case for many corporations, in accordance with him.
“I think we’ll see a lot of companies actually go bankrupt,” the Techno King warned. “I want to make sure that this is not just the good news parade. It’s important to understand that no company is immune to the macroeconomic environment.”
“But that said, it won’t be darkness forever. I expect probably a year of difficulty, globally, for everyone. And then my best guess is that the global economy turns around in roughly 12 months,” he elaborated.
He ended by sending a reassuring message to Tesla buyers.
“Tesla will be in an extremely good position. So anyone who is a long term investor I think will do extremely well.”
This shouldn’t be the primary time that the billionaire has warned in regards to the well being of the economic system.
Last Month, he mentioned that if the Federal Reserve continues to boost rates of interest, the economic system, which is already in “mild recession”, will expertise a “severe recession.”