Tesla CEO Elon Musk has a history of over-promising and under-delivering. Following the most recent quarterly earnings, investor patience may finally be wearing thin.
I have covered advanced biofuel companies for more than a decade, and just about all of them made implausible claims about their technologies. They consistently overpromised and underdelivered, until they finally ran out of money and declared bankruptcy.
I am not sure that electric vehicle (EV) maker Tesla will share the same fate, but management is demonstrating the same pattern. Tesla CEO Elon Musk frequently says grandiose things to investors that ultimately fall far short of his projections. Thus far, this tactic has helped to prop up Tesla’s share price.
I previously covered Tesla’s second-quarter earnings in Tesla Shares Surge Following Its Largest Loss Ever. Tesla reported a record loss, but Tesla CEO Elon Musk has an uncanny way of reassuring investors that everything is just fine. As he did so in the previous earnings call, Tesla shares moved higher.
But investors may finally be running short on patience. Last week Tesla reported a new record loss of $619.4 million for the third quarter, almost double the previous quarter’s record $336.4 million loss.
Things got really interesting on the earnings conference call. Musk had a difficult time reconciling optimistic statements he had made following the previous quarter.
Just to highlight one example, during the previous quarter’s conference call, Musk had stated: “What people should absolutely have zero concern about, and I mean zero, is that Tesla will achieve a 10,000-unit production week by the end of next year.”
Zero concern. That’s a statement of absolute confidence, and Musk’s credibility should be judged on such statements. But when questioned about the previous claim by analyst Ryan Brinkman from JPMorgan Chase, Musk replied that it is now “a bit too early” to make such a forecast, adding:
