Fatal Crash, Stock Slide Keep Tesla's Name In The Headlines
STEVE INSKEEP, HOST:
Tesla is not bankrupt. Let's make that clear at the beginning. When Elon Musk, the leader of the electric car company, declared bankruptcy on Sunday, it was an April Fools' joke. But the company's stock has been dropping. It was no joke that a Tesla car operating on autopilot was involved in a fatal crash. NPR's Sonari Glinton has been covering the ups and downs of this company. He's with us once again. Hi there, Sonari.
SONARI GLINTON, BYLINE: Hey, Steve.
INSKEEP: So I guess it must have seemed funny to Elon Musk when he hit send on that tweet saying we're bankrupt.
GLINTON: Well, yeah. This is - to be clear, Elon Musk is kind of like the president in this way. He does business on Twitter. He uses it as one of his primary tools of communication, and those jokes did not make the stock market like him that much more. Tesla had just come off its biggest recall recently. It had a fatality with its autopilot mode, which is a self-driving feature, and self-driving always scares folks. And finally, Moody's downgraded Tesla's debt rating to junk status. And they say that more downgrades are coming. This is while that car that they are - that they should be building is needing to be coming off the lines.
INSKEEP: Yeah. Let's set the scene here because we've got this guy, Elon Musk, who is seen almost as a genius, certainly a futurist, a visionary. He does so many interesting things in so many different endeavors. And he's got this car company that's very, very popular, very, very well regarded, but they've been struggling to make a mass market car, something that the - something closer to the average person can afford. What's gone wrong?
GLINTON: Well, you know, this is the whole point of the company - absolutely the whole point - is not to make luxury cars, is to make cars for everyone. And until today, we hadn't found out how many cars they made officially in the last quarter. They did not meet their goal of 2,500 cars. They made about 2,020. And Model 3s...
INSKEEP: That's 2,500 cars per week.
GLINTON: Per week.
INSKEEP: OK, all right.
GLINTON: Now, to just give you an example, like, you know, a good car plant in Detroit could be making a hundred - 800 a day, right? So - just, like, to give you an idea. So that's not a tremendous amount of cars. And they haven't hit any of their targets before. And so that puts a squeeze on the company because this is one of those vehicles - like, they could, you know, sort of lose money on some of the other cars. They need to make money on these, in part to pay back that money that's going to be coming due over the next 12 months or so.
INSKEEP: I want to just finish the math that you gave me there, Sonari - 800 a day. You're talking about a car plant - one good car plant might be able to make 25,000 cars in a month, and Elon Musk's Tesla is struggling to make a few thousand Model 3s in the course of a month, basically.
GLINTON: Yeah, exactly. I mean, this company is not like the other car makers. I mean, they're selling dreams, not only electric cars.
INSKEEP: OK. So what is Wall Street thinking about the future of the company then?
GLINTON: Well, until today when they announced these new vehicles - I mean, or announced these numbers, the stock had been sort of tanking because of these April Fools' jokes. But now with this idea that, oh, look, they're coming close to the number, that has sent the stock back up. And it is, you know, a good sign again. However, you know, not meeting your goals is not a thing that other car companies would be rewarded for.
INSKEEP: Just to be totally clear, if they manage to get the production up, is the market there? Are people buying every car that Tesla can make?
GLINTON: Yeah, essentially all those cars are spoken for because people put a thousand dollars down, you know, almost a year ago for the promise of a car one day in the future. And they want them, and there's a waiting list over half a million long.
INSKEEP: OK. Sonari, thanks very much as always.
GLINTON: Always a pleasure.
INSKEEP: NPR's Sonari Glinton covers the auto industry.
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