Musk spars with analysts, blasts ‘bonehead questions’
Tesla Inc.’s quarterly earnings call turned into a testy exchange between Elon Musk and Wall Street analysts.
Heading into the call, things were not looking up for Tesla.
The company had been burning through cash at an alarming rate. Production of the Model 3 sedan had been lagging since July. California regulators had started investigating reports of unsafe workplace conditions at the Fremont factory.
At the beginning of the call, Musk sought to project optimism about the financial health and future direction of the company.
“The thing I’m most excited about is the rapid increase in output,” Musk said. “We’re actually able to achieve a sustained rate of 3,000 vehicles a week.”
He added, “I feel very confident about our ability to get to 5K very soon. … It’s not like you need brain surgery to get these things right. It’s a lot of work. It’s a lot of time and hard work. But it’s very doable.”
Yet as the call dragged on, the Tesla chief seemed to grow increasingly annoyed at analysts’ inquiries.
About 30 minutes into the call, when Toni Sacconaghi of Sanford C. Bernstein & Co. LLC asked about the company’s capital requirements, Musk cut him off.
“Boring, bonehead questions are not cool — next,” Musk said, turning to the operator for the next question.
Joseph Spak of RBC Capital Markets then asked about Model 3 reservation holders and when they could begin configuring their orders.
“These questions are so dry. They’re killing me,” Musk said.
His decision to deflect questions appeared to kill Tesla’s stock, which fell more than 5 percent during a 20-minute period.
Still, the call yielded a few notable updates on production.
Musk indicated the company was slowing the pace of its efforts to introduce the Model Y — a compact sport utility vehicle — after the Model 3 production woes stemming from an overreliance on automation.
Model 3 has been “production hell,” Musk said. While Tesla had originally hoped to introduce the Model Y in late 2019, production won’t start next year as planned, he said. Instead, it will likely begin in early to mid-2020.
Musk also said Tesla will disclose the location of a gigafactory in China as early as the third quarter. The Chinese government announced last month that it would allow foreign auto manufacturers to fully own factories in the country as soon as this year. The gigafactory there would be key for manufacturing batteries, as well as the Model Y.
It was also revealed that Tesla will commit to regularly releasing data on the safety of its Autopilot feature.
In March, a man died in California after his Tesla Model X crashed into a barrier on Highway 101 and was hit by two other vehicles (Greenwire, March 28). Tesla later revealed that its Autopilot system was engaged in the seconds before the crash, prompting a rare rebuke from the National Transportation Safety Board (Greenwire, April 2).
Amitai Bin-Nun, vice president of autonomous vehicles for Securing America’s Future Energy (SAFE), said he welcomed the decision to disclose data on Autopilot.
“Any transparency is a good thing,” Bin-Nun said. “The more the private sector can release information about this technology, the more informed decisions that the public and regulators can make.”