Tesla joins GM, Ford in slowing EV factory ramp as demand fears spread
Business,General Motors,Electric Vehicles,Ford,Tesla
Tesla (TSLA.O) on Wednesday joined General Motors (GM.N) and Ford (F.N) in being cautious about expanding electric vehicle (EV) production capacity, citing economic uncertainties and underscoring fears of a slowdown in demand.
Tesla CEO Elon Musk said he was worried that higher borrowing costs would prevent potential customers from affording its vehicles despite substantial price cuts, and that he would wait for clarity on the economy before ramping up its planned factory in Mexico.
"People hesitate to buy a new car if there's uncertainty in the economy," Musk said on a post-earnings call where he also talked about "paycheck-to-paycheck" pressures on American workers. "I don't want to be going into top speed into uncertainty."
Musk's comments came after warning bells from other automakers and EV startups. It sent shares of Tesla down 8% Thursday as well as shares of other EV makers.
GM said on Tuesday it would delay production by a year of Chevrolet Silverado and GMC Sierra electric pickup trucks at a plant in Michigan, citing flattening demand for EVs.
Detroit peer Ford said last week it would temporarily cut one of three shifts at the plant that builds its electric F-150 Lightning pickup truck. The automaker in July slowed its EV ramp-up, shifting investment to commercial vehicles and hybrids.
