Tesla CEO Elon Musk said that he's worried about the impact of the high interest rate environment on car buyers and the economy at large during the company's earnings call.
Tesla CEO Elon Musk said during the EV maker’s earnings call on Wednesday that he is concerned about the impact of high interest rates on would-be car buyers. "I’m worried about the high interest rate environment that we’re in," Musk told investors. "I just can’t emphasize it enough that for the vast majority of people, buying a car is about the monthly payment. And as interest rates rise, the proportion of that monthly payment that is interest increases naturally.
We have to make our cars more affordable for people to buy, and I keep harping on this interest thing, but it’s just the interest rate raises the cost of the car," Musk said. "Looking at an internal analysis, which I think is more or less on track, but when you look at the cost of the price reductions we’ve made in say the Model Y, and you compare that to how much people’s monthly payment has risen due to interest rates, the price of the Model Y is almost unchanged.
Musk added that there are some additional challenges related to high interest rates making it harder for consumers to access credit as banks and credit unions tighten lending standards. "And there are some incremental challenges beyond that, which is the difficulty of getting credit at all has increased, and so there are a number of people who simply cannot get credit, period.
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