On Oct. 21, Elon Musk warned that the world is in for a global recession that could last until the spring of 2024.
As developments in Europe and China occur, the CEO of Tesla is preparing to go full throttle on production, whether the recession comes or not.
Preparing for recession
On Twitter, Musk replied to a tweet by Shibetoshi Nakamoto, the online alias used by Dogecoin co-creator Billy Markus, who said that while COVID-19 cases were low, the world may still have to grapple with an “impending global recession and nuclear apocalypse.”
“It sure would be nice to have one year without a horrible global event,” Musk replied.
When asked by Tesla Owners Silicon Valley, a Twitter account with almost 600,000 followers, how long the recession would last, Musk replied that it would last “until spring of ‘24.”
Despite GDP growth in the U.S. of six percent in 2021, many expect it to fall by 3.2 percent in 2022, followed by an additional 2.7 percent next year, according to the International Monetary Fund. The Federal Reserve expects GDP in the U.S. will only rise to 0.2 percent this year.
At the same time, Tesla failed to achieve revenue estimates, warning of possible delays for deliveries in 2022. However, Musk remains confident that the U.S. economy is in “pretty good health,” though he stressed that soaring interest rates are affecting it.
He criticized the Federal Reserve’s lifting of its benchmark interest rate in response to a rise in inflation.
“The [Federal Reserve’s] decisions make sense if you’re looking in the rear-view mirror, not if you’re looking out the windshield,” he said.
“A little bit of that is raising interest rates more than they should, but I think they’ll eventually realize that and bring back down, I think,” Musk said.
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Apart from Musk, Amazon founder Jeff Bezos also warned of rough times for the economy, pressing the need to “batten down the hatches.” This statement accompanied a video made by Goldman Sachs CEO David Solomon, who also said in an interview with CNBC that a recession could be under way.
Jamie Dimon, CEO of JPMorgan Chase, also warned of some economic problems coming soon.
Before his comments on recession, Musk was already weary of hints of a recession the week before. Despite the signs, he showed little worry, declaring that Tesla is all “pedal to the metal” on production.
“To be frank, we’re very pedal to the metal come rain or shine,” he answered to an analyst’s question on how Tesla would handle the recession. “We are not reducing our production in any meaningful way, recession or not recession.”
Musk also believes that the world is leaning towards electric vehicles (EVs), making gas-powered vehicles irrelevant and obsolete.
“I wouldn’t say it’s recession-proof but it’s recession-resilient, because basically the people of Earth have made the decision in large part to move away from gasoline cars,” he added.
Musk also said that China and Europe are both in “recessions of sorts,” with China affected by the real estate market, and Europe undergoing an energy crisis.