In a highly charged moment during Tesla’s recent earnings call, CEO Elon Musk vehemently criticized the ongoing stay-at-home orders, which he believes are threatening the company’s momentum and the broader economy.
Musk, who has never been shy about expressing his views, lashed out at the government restrictions in place across California, where Tesla’s only U.S. assembly plant in Fremont remains closed due to the COVID-19 pandemic. “This is fascist. This is not democratic, this is not freedom,” Musk declared. “Give people back their godd— freedom.”
His remarks came after Tesla reported its first-ever profitable quarter to begin the year, with revenue nearing $6 billion, a 25% gross margin, and strong vehicle deliveries. Despite the unprecedented shutdown, Musk’s defiant tone highlighted his concern that the extended shelter-in-place orders, which are set to last through May, could further jeopardize production schedules and cause long-term harm to the economy.
“We are a bit worried about not being able to resume production in the Bay area, and that should be identified as a serious risk,” Musk stated. He further added that the orders were “forcibly imprisoning people in their homes” and undermining “constitutional rights,” which he argued was detrimental to small businesses and their ability to survive.
Despite the controversy, Tesla’s stock surged by 8.7% after the earnings report, marking a continued uptrend for the electric car maker. Investors largely focused on the company’s impressive financial results, which beat Wall Street expectations, and the momentum Musk has built as Tesla continues to scale its operations.
The company has been able to defy expectations, even managing to build 14,000 more cars than it delivered during the quarter, thanks to inventory growth. However, the company still had to burn through $895 million in cash, despite securing $8.1 billion in reserves after a successful stock offering earlier this year.
Tesla’s impressive progress, including the Model Y crossover launch and expansion efforts in China and Germany, were major highlights in the earnings report. However, Musk also confirmed that deliveries for Tesla’s long-awaited Semi truck would be postponed again until 2021, further shifting focus to its global expansion and production ramp-up.
Analysts, however, are split on the outlook for the company. Some, like Gene Munster of Loup Ventures, acknowledge Musk’s outspoken nature but suggest that his comments won’t significantly alter the positive narrative surrounding Tesla’s performance. Others, such as Wedbush’s Dan Ives, argue that while Tesla’s growth story is intact, there is still uncertainty about how demand will fare in the wake of the ongoing pandemic.
Regardless of the debate, Tesla remains firmly in the spotlight as both a leader in the electric vehicle market and a symbol of the broader challenges facing the global economy amid the pandemic.
