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Transcript

Tesla Stock down 20% · Elon Musk Podcast

• 0:02
  Hi everybody, welcome back to the Elon Musk podcast.
• 0:06
  Today we're going to be diving into some recent challenges that
• 0:09
  Tesla has faced in the stock market, which has raised
• 0:12
  questions about the stability of the EV sector as a whole.
• 0:16
  And in less than two weeks, Tesla shares have plummeted
• 0:20
  nearly 20% and this drop has had a ripple effect casting down on
• 0:24
  the future of the electric vehicle industry.
• 0:27
  There's been a chain reaction of concerning statements from auto
• 0:30
  manufacturers, Wall Street analysts and key suppliers like
• 0:33
  Panasonic and ON Semiconductor. But before we get into that, I
• 0:38
  want to tell you about our Patreon.
• 0:40
  It's the way that we can keep the lights on here at the show.
• 0:44
  If you go to patreon.com/stage Zero, that's the name of our
• 0:49
  studio, Stage Zero, You can help us out and we can continue doing
• 0:53
  these shows every single day. So that again, is at
• 0:57
  patreon.com/stage Zero. It's down in the description
• 1:01
  below, too. So what's causing this downturn?
• 1:04
  Could this be a sign of slowing demand for electric cars or is
• 1:08
  there more to the story? Now we're going to be unpacking
• 1:10
  this issue in about 5 separate segments today.
• 1:13
  We're going to be exploring the factors that are affecting Tesla
• 1:17
  stock in the state of the EV market, labor unions, and what
• 1:20
  this could mean for the future of automotive technology.
• 1:24
  Now, the downturn in Tesla stock was initially triggered earlier
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  this month when the company adjusted its growth expectation
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  during its third quarter earnings call.
• 1:33
  This surprised many investors and was soon followed by ominous
• 1:36
  statements from global automakers and Wall Street
• 1:38
  analysts alike. Panasonic, a major battery
• 1:42
  supplier, and ON Semiconductor, a key chip maker for the EV
• 1:45
  industry, also issued warnings about the state of the market.
• 1:49
  The collective alarm has cast a shadow not just on Tesla but
• 1:53
  also on the US automotive sector as a whole.
• 1:56
  Interestingly, Morgan Stanley analyst Adam Jonas positive that
• 2:00
  the billions of dollars invested in the EV sector could actually
• 2:03
  be destroying value rather than creating it.
• 2:07
  And while the traditional automotive market is also
• 2:09
  struggling, mainly due to the high interest rates, the young
• 2:12
  and vulnerable EV sector appears to be taking the brunt of these
• 2:15
  negative market effects now. Meanwhile, the labor union
• 2:19
  situation in the United States is causing additional
• 2:22
  disruption. General Motors recently struck A
• 2:25
  tentative deal with United Auto Workers union following similar
• 2:29
  deals by Ford and Chrysler owned Stellantis.
• 2:32
  And while some analysts speculated these labor
• 2:34
  negotiations could have offered Tesla a competitive edge, that
• 2:39
  theory didn't really pan out. And since the labor disputes
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  began, Tesla shares have plummeted even more drastically
• 2:45
  than those of its American competitors, General Motors and
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  Ford. Now a clear picture is emerging.
• 2:51
  Tesla isn't just facing a softening EV market, it's
• 2:54
  dealing with multi front challenges.
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  These include labor pressures and supply chain issues
• 3:00
  alongside the macroeconomic factors affecting the auto
• 3:04
  industry as a whole. ON Semiconductor.
• 3:07
  That's ON Semiconductor and Panasonic 2.
• 3:10
  Suppliers for Tesla provided the market with further signals that
• 3:14
  all might not be so well. An ON Semiconductor has a
• 3:18
  substantial share in the automotive sector, supplying
• 3:20
  chips to companies with a hefty slice of global EV sales.
• 3:24
  Their disappointing forecast has had a direct impact on Teslas
• 3:27
  already shaky share prices. Similarly, Panasonic's reduction
• 3:31
  in battery production was underscored by lower demand for
• 3:34
  Tesla's high end models in North America.
• 3:37
  And what's particularly noteworthy, these supplier
• 3:40
  warnings essentially echoed Elon Musk's own cautious statements
• 3:43
  from earlier this month. He noted that the combination of
• 3:47
  higher for longer borrowing costs and slowing uptake for
• 3:51
  Tesla's Model S and Model X could potentially lower overall
• 3:55
  vehicle demand. And one can't discuss Tesla's
• 3:58
  falling stock without looking at the contributions of the
• 4:00
  supplier such as Panasonic and ON Semiconductor.
• 4:03
  Panasonic recently reduced its automotive battery production,
• 4:07
  citing decreased demand for high end EVs in North America.
• 4:09
  And the ripple effect of this decision permeated market
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  sentiment, reinforcing existing concerns that Tesla premium
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  models may not be as invincible as once thought.
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  ON Semiconductor, a key supplier for not just Tesla but the whole
• 4:24
  auto sector further dampen investor spirits the chip
• 4:28
  makers. Conservative sales projections
• 4:30
  revealed potential market wide weaknesses and the company has a
• 4:34
  massive footprint in the EV industry, providing essential
• 4:37
  components to the top global EV manufacturers, including leading
• 4:41
  Chinese brands. Thus, when ON Semiconductor
• 4:44
  speaks, the market listens, often with worry and Tesla's
• 4:48
  stock declined was also echoed by the dismal performance of ON
• 4:52
  Semiconductor shares, which fell around 19%.
• 4:55
  This tandem slide could signify that the factors affecting Tesla
• 4:59
  are not isolated, but symptomatic of an industry wide
• 5:01
  issue. Notably, ON Semiconductors
• 5:04
  products are pivotal in the construction of electric
• 5:07
  vehicles, mainly focusing on power management.
• 5:10
  A fall in demand for such a fundamental component serves as
• 5:13
  a bellwether for investor concerns across the whole EV
• 5:16
  industry. Interestingly, investors now
• 5:19
  find themselves grappling with the chicken or the egg scenario.
• 5:22
  Did warnings from automotive companies like Tesla and General
• 5:25
  Motors catalyze on semiconductors?
• 5:27
  Cautious outlook, or was it the other way around now?
• 5:30
  Either way, the combined impact of these major players
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  introduces A sobering effect on the market, causing investors to
• 5:36
  reassess the volatility and future growth of the electric
• 5:40
  vehicle industry. Now at this point, Tesla's road
• 5:43
  ahead is uncertain. The company has lost the
• 5:46
  staggering of $145 billion in market capitalization, and
• 5:50
  investor sentiment seems to be growing increasingly skeptical.
• 5:53
  Not just Tesla, though. The ripple effect is being felt
• 5:56
  across the whole sector and even among traditional automakers who
• 6:00
  are planning to go electric. Tesla remains A dominant player
• 6:03
  in the EV field. But as this recent downturn
• 6:05
  shows, no company is immune to market forces and economic
• 6:09
  realities. What this means for the future
• 6:11
  of Tesla in the broader EV market remains to be seen.
• 6:15
  It looks clear in the positive, but the road ahead is going to
• 6:18
  be far from smooth now. Thank you again for tuning into
• 6:23
  the show today. If you've enjoyed today's
• 6:25
  episode. If you made it this far,
• 6:26
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  up quickly. And also please check out
• 6:41
  patreon.com/stage Zero to help us help you with all the latest
• 6:47
  news about Elon Musk and all of his companies.
• 6:50
  And also please take care of yourselves and each other and
• 6:53
  I'll see you in the next one.