Tesla (NASDAQ:TSLA), on Wednesday, echoed the cautious approach of General Motors (NYSE:GM) and Ford (NYSE:F) towards expanding electric vehicle (EV) production capacity. The company cited economic uncertainties and emphasized concerns about a possible decline in demand.
Tesla CEO, Elon Musk voiced his apprehension about the impact of increased borrowing costs on the affordability of their vehicles, even with significant price reductions. He said that he would wait for clarity on the economy before ramping up its planned factory in Mexico.
"People hesitate to buy a new car if there's uncertainty in the economy," Musk said during a post-earnings call. "I don't want to be going into top speed into uncertainty."
Musk's comments follow warnings from other EV startups and legacy OEMs. As a result, Tesla's shares plummeted by 7% during premarket trading on Thursday. Shares of other EV manufacturers also experienced a similar downward trend.
Electric vehicle startups Lucid (NASDAQ:LCID) and Rivian (NASDAQ:RIVN) saw declines Thursday morning, with both companies experiencing losses exceeding 2%.
GM announced Tuesday, they would delay production of Chevrolet Silverado and GMC Sierra electric pickup trucks at a Michigan plant by one-year, attributing the decision to a stagnation in demand for electric vehicles.
Fellow Detroit automaker, Ford revealed last week its plan to temporarily reduce one of the three shifts at the plant responsible for manufacturing its electric F-150 Lightning pickup truck. The company had slowed down its electric vehicle ramp-up in July, reallocating investments towards commercial vehicles and hybrids.
Shares of TSLA are down 6.70% in pre-market trading Thursday morning.