Elon Musk is pessimistic.
The serial entrepreneur believes that the clouds are getting heavier for the global economy.
He has just made a doom prediction that risks throwing a chill among consumers, as uncertainties remain about the health of the economy, amid stubborn inflation.
For the CEO of Tesla (TSLA) – Get Free Report and owner of Twitter, the next 12 months are going to be difficult. He added that no business is immune and expects a cascade of corporate bankruptcies. The Techno King made this prediction during Tesla’s annual shareholder meeting on May 16 in Austin, Texas. Musk was trying to explain why Tesla decided to lower the prices of its cars six times this year.
“The vast majority of people buy cars based on the monthly payment,” he explained. “It’s just, do they actually have enough money? Can they afford it?”
He then added that this issue has become even more important because interest rates are high and, at the same time, there is a banking crisis which prevents many banks from lending money to everyone who needs it.
Lenders, he argued, are focused on saving themselves from failing.
‘It Won’t Be Darkness Forever’
As a result, “this is going to be a challenging 12 months, I want to be sort of realistic about it. Tesla is not immune to the global economic environment. I expect to be, at a macroeconomic level, difficult for at least the next 12 months.”
But “Tesla will get through it and will do well,” he said.
This will not be the case for most companies, according to him.
“I think we’ll see a lot of companies actually go bankrupt,” the Techno King warned. “I want to make sure that this is not just the good news parade. It’s important to understand that no company is immune to the macroeconomic environment.”
“But that said, it won’t be darkness forever. I expect probably a year of difficulty, globally, for everyone. And then, my best guess is that the global economy turns around in roughly 12 months,” he added.
He ended by sending a reassuring message to Tesla investors.
“Tesla will be in an extremely good position. So anyone who is a long term investor I think will do extremely well.”
This is not the first time that the billionaire has warned about the health of the economy.