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Tesla shares tank after Musk shows thin skin

May 3, 2018

Flamboyant carmaker Elon Musk was thin-skinned in a quarterly conference call with analysts and investors. His annoyed refusal to address his company's failings caused shares to plummet.

Elon Musk, CEO SpaceX & Tesla Inc.
Image: picture-alliance/AP Photo/J. Raoux

Elon Musk, the founder and CEO of electric car manufacturer Tesla, displayed open disdain for questions about his company's future in a quarterly conference call with analysts and investors Wednesday.

After berating an investment analyst who had enquired about the company's potential need for cash in the face production snags — telling him that "boring bonehead questions are not cool" — Musk later refused to answer a follow-up question by another analyst.

He then abruptly ended his call with professionals, saying: "Sorry, these questions are so dry. They're killing me." He then took questions from fans via YouTube. Tesla shares fell by 5 percent within 20 minutes of the exchange.

Massive cash burn

Tesla's future hinges on the success of its new Model 3 car, which will have a sticker price half that of its Model S luxury sedan. Tesla has continued to operate at a loss despite the optimism of its boss, with Model 3 production delays costing the company some $745.3 million (€621.3 million) in the first quarter of 2018. On average, the company spent $57 million a week for the quarter.

On the heels of Tesla's first quarter net loss of $709.6 million, Musk tried to mollify skeptics, saying it was "quite likely" the company would see a positive cash flow in the third quarter. 

Norway's booming electric vehicle industry

Automation 'overrated'

The Model 3 is key to Tesla's profitability plan, yet production at its Freemont, California, plant has lagged. Musk has blamed low output on automation, which he said was "overrated," and he promised to hire more humans to meet demand.

Musk, who tweeted that he is sleeping at the factory until production problems could be ironed out, also shocked investors with an April Fool's Day tweet announcing the company had gone bankrupt.

The 15-year-old company has been publicly traded for eight years. In that time it has had two profitable quarters. Both Moody's and Standard & Poor's ratings agencies have recently downgraded Tesla's credit rating and outlook to negative.

js/sms (AP, Reuters)