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It Is Not New That The Electric Car Sector Has Been Experiencing Instabilities Regarding Metal Prices, Which Have Been Scarce Since The Beginning Of The Pandemic. Mining Has Not Been Able To Keep Up With Technological Developments At The Same Pace.
In an email sent to his collaborators, billionaire Elon Musk, owner of Tesla, told the directors that they should pause hiring by at least 10%. According to him, he has a negative feeling about the electric car sector. Lithium, which is essential for manufacturing batteries, has been experiencing a sharp rise because, during the year 2021, there was an 11% production shortfall compared to what was needed to meet global market demand.
The news was shared by Reuters, which claimed to have access to the billionaire’s text. The announcement was made on this Friday, June 3rd, and may indicate a possible recession in the economic and electric car sector, especially regarding batteries. So far, it is known that over 100,000 people were employed by Tesla by the end of last year. The company has not commented, however, on whether it will lay off some of its current employees or if they will only pause hiring and job vacancies.
Aesla Shares Dropped At Least 3% and Elon Musk May Have Compromised Income
Tesla shares, which are listed in Frankfurt, have already fallen by at least 3% during pre-market trading. Nasdaq futures, even before the market opens, are already down by 0.6%. The news, according to Reuters, may negatively impact the sector during this weekend.
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Tesla has shown interest in continuing its production in the city of Shanghai. However, they had to stop after some of China’s restrictions due to the Covid-19 pandemic.
Carsten Brzeski, global head of macroeconomic research at Dutch bank ING, stated in an interview that billionaire Elon Musk’s negative sentiment, which has also made him more famous for his investments in cryptocurrencies, is also shared by banks and companies around the world due to the high inflation left by the health crisis.
Inflation Is Worrying Investors – And We Are Not Just Talking About Brazil!
After Elon Musk’s email was sent, the hypothesis arose that the crisis could result in the CEO of JPMorgan Chase & Co, Jamie Dimon, and the president of Goldman Sachs, John Waldron, being dismissed from Tesla, putting the company’s reputation regarding electric car development at risk.
Inflation in the United States has been present since Joe Biden took office. It has been driving up the cost of living for consumers. Musk, however, has not stated what the cause of his negative feeling may be, although the media believes it is due to the costs of maintaining the businesses.
Due to the difficulties Musk is facing in continuing to manufacture electric cars in countries with cheaper and abundant labor, analysts predict challenges in remaining solely in North America.
Wedbush Securities, Daniel Ives, stated that Musk would have difficulties due to the lack of cheap labor, which would be causing delays in car deliveries compared to the availability that his competitors have on a multinational scale.
Follow Click Oil And Gas To Stay Updated On The Billionaire’s Statements This Friday, June 3rd, Regarding The Corporate Email.
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