Elon Musk sees ‘pretty nutty’ demand for Tesla even with a recession

Qilai Shen | Bloomberg | Getty Images

GP: Elon Musk, chief executive officer of Tesla Inc., speaks during an event at the site of the company’s manufacturing facility in Shanghai, China, on Monday, Jan. 7, 2019.

Tesla CEO Elon Musk said the electric car maker is predicting “pretty nutty” growth in demand this year that will withstand a global recession.

“Even if there’s a global recession, we’re expecting deliveries this year to be about 50 percent higher than last year. And it could be a lot more than that, but even with tough economic times to see 50 percent growth is pretty nutty,” Musk told analysts on a conference call after releasing fourth-quarter earnings Wednesday.

Tesla plans to substantially ramp up production and deliveries this year, aiming for 360,000 to 400,000 vehicle deliveries, about 45 to 65 percent more than its deliveries in 2018, the company said.

The demand outlook for Tesla’s cars is one of the main issues on many investors’ minds.

Tesla recently cut prices across its lineup in the United States to offset the a reduction in the federal tax credit for electric vehicles. The credit was cut in half from $7,500 to $3,750 starting Jan. 1, part of a plan to phase out the credit for every manufacturer, once a threshold of 200,000 cars sold is crossed.

The gradual expiration of the tax credit has particular implications for the mid-sized Model 3 sedan. The Model 3 was originally intended to be priced starting at $35,000, a price a broad swath of car buyers could afford, in contrast to Tesla’s more high-end Model S sedan and Model X sport utility. However, the cheapest Model 3 costs $44,000.