Elon Musk Responds To GM's Challenge

Yesterday, GM CEO Marry Barra said that by mid-century, GM will surpass Tesla in sales and become the global leader.

Musk later tweeted in response: Tesla is still the highest-producing (electric) car brand within the United States.

He not only responded to the netizen who commented on the matter, but also made a point of @USPresident George Biden, as the netizen claimed in his comment that Biden had ignored Tesla and instead put GM on the pedestal.

Below the GM-related news, Twitter users also spared no effort in blasting Biden and GM. Some mocked the way GM leads the U.S. auto industry by investing in Mexico and adding local jobs. Others asked Biden: Why is Biden's favorite company, GM, taking jobs away from the U.S.? Are those unions feeling OK now?

In April 2021, General Motors announced that it would invest more than $1 billion in Mexico to produce electric cars, a move that sparked discontent among the United Auto Workers union. Some describe the investment as a "slap in the face" to Americans, because GM is one of the members lobbying the Biden administration to increase investment in electric vehicles, and ended up enjoying the concessions while building plants abroad.

GM is "unpopular", Tesla naturally become a positive teaching material. After all, Tesla built a factory in the United States, increasing local employment and creating significant profits.

Tesla's current situation, however, may not look so good to Wall Street.

Bill Selesky, an analyst with Argus Research, said it's entirely predictable that Tesla will have a tough second quarter due to ongoing supply chain issues and the shutdown of some of its factories.

Tesla is expected to report its second-quarter 2022 results after the U.S. stock market closes on Wednesday.

The consensus among Wall Street analysts is that Tesla's revenue for the second quarter of 2022 was around $16.52 billion, down about 4.6 percent from a year ago and down about 12 percent sequentially. And adjusted earnings per share slipped to $1.81, down 44 percent year-over-year.

But some analysts are optimistic: Q2 revenue will be around $17.186 billion and profit per share will reach $2.06. Analysts are currently very divided in their predictions, with optimists believing that Tesla will not experience a slowdown in the second quarter.

But Tesla has previously announced that its electric vehicle deliveries in the second quarter were more than 254,000 units, down 50,000 units from estimates.

Looking to the future

Frank Curzio, CEO of Curzio Research, said his expectations for Tesla's second quarter were weak and that the key was how Tesla was looking at its future outlook, as everyone expected the company to perform strongly in the second half of the year.

Wall Street's biggest concern is not how much revenue changes, but how Musk and Tesla executives assess the future outlook.

The most closely watched questions will focus on whether the Texas mega-factory, Berlin mega-factory and Shanghai mega-factory can operate at full capacity, and whether Tesla will reaffirm its goal of 50 percent compound annual growth in deliveries by 2022.

To reach that goal, Tesla needs to deliver 1.5 million vehicles this year. Previously Tesla announced that its first-half Tesla deliveries were 564,000 units.

Deutsche Bank analyst Emmanuel Rosner mentioned in his report that he expects Tesla to maintain that annual delivery target, which means Tesla's deliveries will increase significantly in the second half of the year.

In addition, Wall Street is also closely watching updates on production news for the new pickup truck Cybertruck, as well as the self-driving cab that Musk mentioned at last quarter's earnings meeting, and Wall Street wants to know if the cab will remain on Tesla's 2024 to-do list.

About Author
John Murphy

John Murphy is the founder of TOPCARS Tesla Aftermarket Accessories, as well as an investor in Tesla and owner of the Model Y. He posts about Tesla news while running the site on a daily basis.

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