Elon Musk ‘acted like a little baby’ during Tesla’s terrible earnings call and ‘blamed high interest rates’ as profits fell to $1.85 billion, sending shares tumbling 15%

Elon Musk was ‘almost in tears’ as he struggled to defend Tesla’s crashing profits from angry investors, prompting analysts to ask ‘is the story over?’

The backlash has grown since the world’s richest man blamed interest rates for a 44 percent drop in net profit during a “terrible” earnings call with shareholders on Wednesday.

Share prices fell 15 percent in the worst week of the year after tycoon admitted ‘we’ve dug our own grave’ with their long-delayed all-electric ‘Cybertruck’.

But it was his lack of ideas that angered investors who have long been accustomed to giving the tech visionary the benefit of the doubt.

“It’s sad when a leader cries about the economy instead of channeling it and coming up with a plan,” YouTuber Kevin Paffrath told Yahoo Finance.

“We need to know that the light is at the end of the tunnel, rather than hearing a complaining CEO who doesn’t actually provide that path.”

The famously emotional billionaire “acted like a little baby,” Paffrath said, blaming rising interest rates for delays at the planned $10 billion Mexican gigafactory that will produce batteries for its fleet of electric vehicles.

And he emphasized that it was rising interest rates, which have risen from 3.5 to 8.5 percent in the past 18 months, that have crippled demand for his cars.

“If interest rates stay high or go even higher, it will be much more difficult for people to buy the car,” he told his audience.

“They simply can’t afford it.”

The company’s share of the electric vehicle market has fallen from 60 to 50 percent in the past six months, despite a price cut of a quarter, with the cost of a Model Y SUV now starting at $44,000.

There was more good news for consumers as Musk’s new CFO Vaibhav Taneja emphasized that “reducing the cost of our vehicles is our top priority.”

The company’s profits fell to $1.9 billion in the three months to September, down $1.4 billion from a year earlier.

Tesla’s year-over-year sales growth was the weakest since the pandemic hit in the second quarter of 2020, and third-quarter profit fell 37% to 66 cents per share, the lowest in two years.

Overall, the company reported second-quarter revenue of $23.4 billion, below analyst expectations of about $24.2 billion.

Wedbush Securities analyst Dan Ives shared this businessinsider.com the call was a “mini-disaster,” with Musk remaining silent on his company’s progress in developing its long-promised autonomous vehicles.

“We heard from a much more cautious Musk who focused on higher interest rates, AI investments and highlighted the difficult path for Cybertruck production over the next twelve to eighteen months,” he added.

Musk has set November 30 as the launch date for the Cybertruck, but the price and final specifications are still a mystery.

It’s been four years since he showed off the prototype at an embarrassing launch event where the ‘unbreakable’ window broke.

He has described it as a vehicle that will “change the look of the roads,” with “better practicality than a truck with better performance than a sports car.”

But he told investors on Wednesday that it will take another 18 months for the currency to become a “positive cash flow contributor.”

“Demand is off the charts,” he pointed out.

“We have over a million people who have pre-ordered the car, so it’s not a question of demand, but we have to make it a price that people can afford, insanely difficult things.”

“The blood, sweat and tears that will be required to achieve this is simply staggering.”

He further promised to “invest significantly in the development of AI,” but there was no repeat of his boast about the “potential to make Tesla by far the most valuable company in the world” with “fully autonomous cars at scale and fully autonomous humanoid robots’. .

Shares in the company remain 96 percent higher than at the start of 2023, but the company’s long honeymoon with market makers may be coming to an end.

“No more rose-colored glasses,” Wells Fargo analyst Colin Langan wrote in a note to investors.

“How can we defend a ‘growth’ stock that appears poised to enter its second straight year of earnings decline?” asked Morgan Stanley’s Adam Jonas.

“Five percent auto revenue growth, collapsing margins and trading at 200x FCF,” concluded Bernstein’s Toni Sacconaghi.

“Is the story broken?”