“Before this statement, investors may have speculated that a real profit might come in 2017 or 2018. Now they can see they may have to wait for five years.”
— Maryann Keller, independent automotive consultant, on Tesla CEO Elon Musk’s estimate that the Palo Alto electric-car maker will be profitable by the year 2020, when it expects to be making 500,000 cars.
Musk’s comments Tuesday in Detroit, which included the news that fourth-quarter sales fell in China, were followed by a steep decline in the company’s stock. Shares continue to fall sharply today, down 6.85 percent to $190.26. That’s off almost 35 percent from their all-time high of $291.42, reached in September.
Musk also called the China market “a wild card that seems to change for reasons we don’t understand,” according to Bloomberg. He did say, however, that Chinese Tesla owners’ concerns about the company’s charging infrastructure have been addressed.
Even before Musk’s comments Tuesday, Tesla shares had been falling amid concerns that low gas prices will reduce demand for electric vehicles.
Meanwhile, Tesla has had run-ins with car dealerships that have fought against Tesla’s direct-sales model. Consumerist notes that Musk indicated Tuesday that the company would consider working with dealerships in the future. But Musk reportedly said: “If you’re a jerk to us, we’re not going to turn around and try to do a partnership later.”
Photo from AFP/Getty Images
