Musk Says Recession "More Likely Than Not" in Near Term; Coy About Trump Support

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Musk Says Recession "More Likely Than Not" in Near Term; Coy About Trump Support
Credit: © Reuters.

By Geoffrey Smith -- Elon Musk said he thinks a recession is 'more likely than not' in the near term as central banks around the world hurry to withdraw the stimulus they put in place during the pandemic.

Speaking remotely at a conference in Qatar organized by Bloomberg, Musk also said in a wide-ranging interview that the slowdown is likely to result in a 10% cut in the number of salaried employees at Tesla (NASDAQ: TSLA ), or around 3% of its total workforce.

Musk played down fears of rising competition for Tesla in the electric vehicle space, pointing to his company's full order books and successive capacity expansions in Shanghai, Germany, and Texas.

"Our constraints are much more in raw materials and being able to scale up production” than in competition, Musk said, although he acknowledged the rise of Chinese startups such as Nio (NYSE: NIO ), Xpeng (NYSE: XPEV ), and BYD (OTC: BYDDY ).

“I am very impressed with the car companies in China in general,” he said. “I think they are extremely competitive, hard working and smart.”

Elsewhere in the interview, Musk was non-committal when asked whether he would support former President Donald Trump if he runs for President again in 2024.

"I’m undecided at this point on that election," he said.

Musk said on Twitter last week that he was leaning toward supporting Florida Governor Ron DeSantis, who has been widely tipped to run.

In the interview, Musk said little new regarding his planned acquisition of Twitter (NYSE: TWTR ), beyond acknowledging uncertainty over whether the debt part of the overall financing "comes together." Musk's initial plan to borrow heavily against his Tesla stock was derailed by a sharp drop in their value as the Federal Reserve speeded up its interest rate hikes. Given the leveraged buyout structure of the Musk-led bid, concerns have also been raised about Twitter's ability to service whatever debt it is saddled with at the end of the process.

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