Elon Musk to Tesla Investors: ‘There Is Not a Demand Problem. Absolutely Not’

Photo Credit: Jae C Hong/AP/Shutterstock
June 12, 2019

By Spencer Feingold

Tesla CEO Elon Musk sought to reassure investors and alleviate market concerns at the company's annual shareholder meeting on Tuesday

“I want to be clear, there is not a demand problem. Absolutely not,” Musk said within the first few minutes of this presentation.

Tesla's ($TSLA) stock, nonetheless, dropped by nearly 3 percent Wednesday morning — shares were up roughly 12 percent in the days prior but have been down more than 35 percent year-to-date.

Tuesday’s meeting follows a difficult year for Tesla, which has struggled to meet delivery benchmarks for its electric vehicles and reach profit goals. The company delivered just 63,000 of its cars in the first quarter of 2019, a steep decline from the quarter prior, and reported a net loss of $702 million.

Musk said at the shareholder meeting that demand for Tesla cars was no in fact waning, and that the company has a “decent shot” at breaking sales record in the second quarter of 2019.

“Sales have far exceeded production, and production has been pretty good … we have a decent shot at a record quarter on every level,” he said, adding that the vast majority of sales are coming from new customers.

Tesla said it plans to deliver 90,000 to 100,000 vehicles in the second quarter, and in April, the company reaffirmed its guidance of 360,000 to 400,000 total deliveries this year.

“In the near term it all comes down to demand,” Dan Ives, managing director of the financial services firm Wedbush Securities, told Cheddar on Tuesday. “This is going to be a defining period for Tesla and Musk in terms of what happened over the next six months.”

During Tuesday’s meeting, Musk also touted Tesla’s progress in developing autonomous vehicles, saying that all of the capabilities will be ready once government regulators approve driverless cars.

“It is financially insane to buy anything except an electric car that is upgradeable to autonomy,” Musk said. He also compared driving fossil fuel cars to “riding a horse and using a flip phone.”

Musk and other executives also detailed the forthcoming Tesla pickup truck, which will be unveiled this summer. “I think it is going to be great,” Musk said. “I think it’s the coolest car I’ve ever seen, to be frank.”

At the end of the meeting, Musk took a number of questions from the audience, including one from a PETA (People for the Ethical Treatment of Animals) activist who urged Tesla to stop using leather on its steering wheels. Musk said the company offers a non-leather wheel upon request, and that its cars are “close to having” non-leather heated steering wheels.

Following a question on Tesla's relationship with the press, Musk — a media star himself — criticized negative coverage, saying the narrative around Tesla is the “most crazy disinformation campaign I’ve ever seen.”