Elon Musk: Buying gasoline car like “riding a horse and using a flip phone”

Tesla’s shareholder meetings are famous for the freewheeling question-and-answer sessions CEO Elon Musk holds with investors. One question that didn’t come up at Tuesday’s meeting: Will there be another one next year?

The electric car and battery company is coming off a tumultuous year. Tesla had two profitable quarters followed by a slowdown in the first quarter of 2019, when the company lost $700 million on slow deliveries and was forced to raise cash. That comes on the heels of aggressive tweeting hyping company results by CEO Elon Musk, which led the Securities and Exchange Commission to fine the company $20 million and remove Musk as board chair. The company’s stock fell to a three-year low last month after an influential analyst downgraded it, saying Musk was too distracted with “sci-fi” projects.

Currently, Tesla’s problem remains driving demand for the Model 3, its newest and cheapest model, priced at about $35,000..

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“We continue to believe that Musk and Tesla are facing a ‘fork in the road scenario’ with Model 3 demand needing to rebound significantly into the next few quarters for the company to deliver sustained profitability,” Wedbush analyst Daniel Ives said in a note before the meeting.

At Tuesday’s annual meeting, at the Computer History Museum in Mountain View, California, Musk entertained investors with stories of milestones reached and extolled the popularity of the Model 3, which he said is the fourth-best-selling car in the U.S. by volume. In terms of revenue, Musk said, the Model 3 is No. 1.

“I want to be clear—there is not a demand problem,” Musk said. “Sales have far exceeded production, and production’s been pretty good.”

“We have a decent shot at a record quarter on every level,” he added.

Musk also said that public policy was on his side, with country after country moving to phase out combustion engines in cars. “It’s basically financially insane to buy anything other than an electric car that can upgrade to full autonomy,” he said.

“If you buy a gasoline car that is not self-driving, it’s like riding a horse and using a flip phone,” he added. “Hello—it’s not wise.”

— This is a developing story.