Texas economy

Elon Musk says global economy has passed peak inflation

Elon Musk, CEO of Tesla and the world’s richest person, said he saw signs that the global economy had “passed peak inflation”.

Speaking at the electric vehicle maker’s annual shareholder meeting, Musk said Tesla’s raw material and component costs would trend lower over the next six months. He also reiterated that he expects a mild recession that could last 18 months.

“The trend is down, suggesting we’re past peak inflation,” Musk said at Tesla headquarters in Austin, Texas.

“I think inflation is going to drop quickly” at some point in the future, he added.

Central banks have embarked on a policy-tightening course as inflation pressures consumers and corporate earnings. In the United States, consumer prices rose 9.1% in June from a year earlier, and US Federal Reserve officials say price increases have yet to slow. The next inflation release will be on August 10.

“We kind of have a sense of how prices are changing over time,” Musk said, citing Tesla’s need to purchase raw materials often months in advance of their use.

“The interesting thing that we’re seeing now is that most of our core products, most of the things that go into a Tesla – not all of them, but more than half – prices tend to come down in six months. “

While Tesla takes a global view of input costs and consumer health, Mr Musk warned that making macroeconomic predictions is “a recipe for disaster” and said his comments amounted to “guesswork” and “total speculation”. The chief executive also warned that trends could change.

Reservation holders and future customers of Tesla’s next Cybertruck could still be hurt by inflation, Musk suggested.

The Pickup – inspired by the flying cars from the 1982 movie blade runner – was unveiled in November 2019, and “a lot has changed” since then, he said.

As the company began taking bookings, Mr. Musk announced a starting price of $39,900.

“Specifications and prices will be different,” Musk said. “I hate to give a bit of bad news. But there is no way to have anticipated the inflation we have seen and various problems.

Updated: August 06, 2022, 04:30